Correlation Between Shinhan Inverse and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Kakaopay Corp 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 Kakaopay Corp 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 kakaopay Corp, you can compare the effects of market volatilities on Shinhan Inverse and Kakaopay Corp 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Kakaopay Corp.
Diversification Opportunities for Shinhan Inverse and Kakaopay Corp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Kakaopay is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay Corp 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Kakaopay Corp go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Kakaopay Corp
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to under-perform the Kakaopay Corp. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Inverse WTI is 1.35 times less risky than Kakaopay Corp. The stock trades about -0.3 of its potential returns per unit of risk. The kakaopay Corp is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,670,000 in kakaopay Corp on October 25, 2024 and sell it today you would lose (115,000) from holding kakaopay Corp or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. kakaopay Corp
Performance |
| Timeline |
| Shinhan Inverse WTI |
| kakaopay Corp |
Shinhan Inverse and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Kakaopay Corp
The main advantage of trading using opposite Shinhan Inverse and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Kakaopay Corp 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp's long position.| Shinhan Inverse vs. KB Financial Group | Shinhan Inverse vs. Shinhan Financial Group | Shinhan Inverse vs. Hana Financial | Shinhan Inverse vs. Woori Financial Group |
| Kakaopay Corp vs. Korea Refract | Kakaopay Corp vs. Korea Refractories Co | Kakaopay Corp vs. Shinhan Inverse WTI | Kakaopay Corp vs. SAMYOUNG M Tek 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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