Correlation Between Shinhan Inverse and Cherrybro CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Cherrybro CoLtd at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shinhan Inverse and Cherrybro CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse WTI and Cherrybro coLtd, you can compare the effects of market volatilities on Shinhan Inverse and Cherrybro CoLtd and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shinhan Inverse with a short position of Cherrybro CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Cherrybro CoLtd.
Diversification Opportunities for Shinhan Inverse and Cherrybro CoLtd
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Cherrybro is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and Cherrybro coLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherrybro coLtd and Shinhan Inverse is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shinhan Inverse WTI are associated (or correlated) with Cherrybro CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherrybro coLtd has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Cherrybro CoLtd go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Cherrybro CoLtd
Assuming the 90 days trading horizon Shinhan Inverse is expected to generate 9.11 times less return on investment than Cherrybro CoLtd. But when comparing it to its historical volatility, Shinhan Inverse WTI is 2.39 times less risky than Cherrybro CoLtd. It trades about 0.06 of its potential returns per unit of risk. Cherrybro coLtd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 71,900 in Cherrybro coLtd on September 3, 2024 and sell it today you would earn a total of 12,100 from holding Cherrybro coLtd or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. Cherrybro coLtd
Performance |
| Timeline |
| Shinhan Inverse WTI |
| Cherrybro coLtd |
Shinhan Inverse and Cherrybro CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Cherrybro CoLtd
The main advantage of trading using opposite Shinhan Inverse and Cherrybro CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Cherrybro CoLtd can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cherrybro CoLtd will offset losses from the drop in Cherrybro CoLtd's long position.| Shinhan Inverse vs. Kukdo Chemical Co | Shinhan Inverse vs. Korea Petro Chemical | Shinhan Inverse vs. LG Chemicals | Shinhan Inverse vs. Daehan Synthetic Fiber |
| Cherrybro CoLtd vs. Echomarketing CoLtd | Cherrybro CoLtd vs. Youngchang Chemical Co | Cherrybro CoLtd vs. Alton Sports CoLtd | Cherrybro CoLtd vs. Netmarble Games Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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