Correlation Between Shinhan Inverse and DYPNF CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and DYPNF 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 DYPNF 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 DYPNF CoLtd, you can compare the effects of market volatilities on Shinhan Inverse and DYPNF 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 DYPNF CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and DYPNF CoLtd.
Diversification Opportunities for Shinhan Inverse and DYPNF CoLtd
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and DYPNF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and DYPNF CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DYPNF 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 DYPNF CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DYPNF CoLtd has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and DYPNF CoLtd go up and down completely randomly.
Pair Corralation between Shinhan Inverse and DYPNF CoLtd
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.62 times more return on investment than DYPNF CoLtd. However, Shinhan Inverse WTI is 1.61 times less risky than DYPNF CoLtd. It trades about -0.01 of its potential returns per unit of risk. DYPNF CoLtd is currently generating about -0.04 per unit of risk. If you would invest 315,500 in Shinhan Inverse WTI on August 27, 2024 and sell it today you would lose (41,000) from holding Shinhan Inverse WTI or give up 13.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.45% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. DYPNF CoLtd
Performance |
| Timeline |
| Shinhan Inverse WTI |
| DYPNF CoLtd |
Shinhan Inverse and DYPNF CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and DYPNF CoLtd
The main advantage of trading using opposite Shinhan Inverse and DYPNF CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, DYPNF 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 DYPNF CoLtd will offset losses from the drop in DYPNF CoLtd's long position.| Shinhan Inverse vs. Cuckoo Electronics Co | Shinhan Inverse vs. Daejoo Electronic Materials | Shinhan Inverse vs. BNK Financial Group | Shinhan Inverse vs. Dgb Financial |
| DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. LG Energy Solution | DYPNF CoLtd vs. SK Hynix |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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