Correlation Between Shinhan Inverse and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Dongbang Transport 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 Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse Silver and Dongbang Transport Logistics, you can compare the effects of market volatilities on Shinhan Inverse and Dongbang Transport 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 Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Dongbang Transport.
Diversification Opportunities for Shinhan Inverse and Dongbang Transport
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Dongbang is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport 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 Silver are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Dongbang Transport go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Dongbang Transport
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to generate 0.88 times more return on investment than Dongbang Transport. However, Shinhan Inverse Silver is 1.14 times less risky than Dongbang Transport. It trades about 0.27 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.03 per unit of risk. If you would invest 325,500 in Shinhan Inverse Silver on August 29, 2024 and sell it today you would earn a total of 35,500 from holding Shinhan Inverse Silver or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Dongbang Transport |
Shinhan Inverse and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Dongbang Transport
The main advantage of trading using opposite Shinhan Inverse and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Shinhan Inverse vs. Samyung Trading Co | Shinhan Inverse vs. Genie Music | Shinhan Inverse vs. Sangsangin Investment Securities | Shinhan Inverse vs. SBI Investment KOREA |
| Dongbang Transport vs. AptaBio Therapeutics | Dongbang Transport vs. Daewoo SBI SPAC | Dongbang Transport vs. Dream Security co | Dongbang Transport vs. Microfriend |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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