Correlation Between Shinhan Inverse and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Shinhan Inverse and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Dongwoo Farm.
Diversification Opportunities for Shinhan Inverse and Dongwoo Farm
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Dongwoo is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Dongwoo Farm
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 1.75 times more return on investment than Dongwoo Farm. However, Shinhan Inverse is 1.75 times more volatile than Dongwoo Farm To. It trades about 0.17 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about 0.22 per unit of risk. If you would invest 257,000 in Shinhan Inverse WTI on November 27, 2024 and sell it today you would earn a total of 10,500 from holding Shinhan Inverse WTI or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. Dongwoo Farm To
Performance |
| Timeline |
| Shinhan Inverse WTI |
| Dongwoo Farm To |
Shinhan Inverse and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Dongwoo Farm
The main advantage of trading using opposite Shinhan Inverse and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Shinhan Inverse vs. Innowireless Co | Shinhan Inverse vs. Kisan Telecom Co | Shinhan Inverse vs. Chorokbaem Healthcare Co | Shinhan Inverse vs. Nature and Environment |
| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. HYUNDAI FEED | Dongwoo Farm vs. Neo Cremar Co | Dongwoo Farm vs. Wing Yip Food |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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