Correlation Between Shinhan Inverse and SS TECH
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and SS TECH 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 SS TECH 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 SS TECH, you can compare the effects of market volatilities on Shinhan Inverse and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and SS TECH.
Diversification Opportunities for Shinhan Inverse and SS TECH
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and 101490 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and SS TECH go up and down completely randomly.
Pair Corralation between Shinhan Inverse and SS TECH
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.59 times more return on investment than SS TECH. However, Shinhan Inverse WTI is 1.69 times less risky than SS TECH. It trades about 0.05 of its potential returns per unit of risk. SS TECH is currently generating about -0.11 per unit of risk. If you would invest 249,500 in Shinhan Inverse WTI on September 3, 2024 and sell it today you would earn a total of 29,000 from holding Shinhan Inverse WTI or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.74% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. SS TECH
Performance |
| Timeline |
| Shinhan Inverse WTI |
| SS TECH |
Shinhan Inverse and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and SS TECH
The main advantage of trading using opposite Shinhan Inverse and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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