Correlation Between Shinhan Inverse and RPBio
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and RPBio 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 RPBio 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 RPBio Inc, you can compare the effects of market volatilities on Shinhan Inverse and RPBio 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 RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and RPBio.
Diversification Opportunities for Shinhan Inverse and RPBio
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and RPBio is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc 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 RPBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPBio Inc has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and RPBio go up and down completely randomly.
Pair Corralation between Shinhan Inverse and RPBio
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.73 times more return on investment than RPBio. However, Shinhan Inverse WTI is 1.37 times less risky than RPBio. It trades about -0.01 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.07 per unit of risk. If you would invest 316,000 in Shinhan Inverse WTI on August 31, 2024 and sell it today you would lose (37,500) from holding Shinhan Inverse WTI or give up 11.87% 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. RPBio Inc
Performance |
| Timeline |
| Shinhan Inverse WTI |
| RPBio Inc |
Shinhan Inverse and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and RPBio
The main advantage of trading using opposite Shinhan Inverse and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, RPBio 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 RPBio will offset losses from the drop in RPBio's long position.| Shinhan Inverse vs. Seoyon Topmetal Co | Shinhan Inverse vs. Taeyang Metal Industrial | Shinhan Inverse vs. Youngsin Metal Industrial | Shinhan Inverse vs. Infinitt Healthcare Co |
| RPBio vs. Jeju Semiconductor Corp | RPBio vs. TS Investment Corp | RPBio vs. ABOV Semiconductor Co | RPBio vs. Hanmi Semiconductor Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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