Correlation Between Shinhan Inverse and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Nam Hwa 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 Nam Hwa 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 Nam Hwa Construction, you can compare the effects of market volatilities on Shinhan Inverse and Nam Hwa 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 Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Nam Hwa.
Diversification Opportunities for Shinhan Inverse and Nam Hwa
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Nam is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction 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 Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Nam Hwa go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Nam Hwa
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to under-perform the Nam Hwa. In addition to that, Shinhan Inverse is 2.21 times more volatile than Nam Hwa Construction. It trades about -0.29 of its total potential returns per unit of risk. Nam Hwa Construction is currently generating about -0.18 per unit of volatility. If you would invest 406,000 in Nam Hwa Construction on November 5, 2024 and sell it today you would lose (10,500) from holding Nam Hwa Construction or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Nam Hwa Construction
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Nam Hwa Construction |
Shinhan Inverse and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Nam Hwa
The main advantage of trading using opposite Shinhan Inverse and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.| Shinhan Inverse vs. PJ Metal Co | Shinhan Inverse vs. Nh Investment And | Shinhan Inverse vs. Pyung Hwa Industrial | Shinhan Inverse vs. Seoul Food Industrial |
| Nam Hwa vs. CU Medical Systems | Nam Hwa vs. Koryo Credit Information | Nam Hwa vs. Lotte Non Life Insurance | Nam Hwa vs. Hana Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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