Correlation Between Shinhan Inverse and Woorim Machinery
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Woorim Machinery 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 Woorim Machinery 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 Woorim Machinery Co, you can compare the effects of market volatilities on Shinhan Inverse and Woorim Machinery 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 Woorim Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Woorim Machinery.
Diversification Opportunities for Shinhan Inverse and Woorim Machinery
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Woorim is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Woorim Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woorim Machinery 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 Woorim Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woorim Machinery has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Woorim Machinery go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Woorim Machinery
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to generate 0.7 times more return on investment than Woorim Machinery. However, Shinhan Inverse Silver is 1.42 times less risky than Woorim Machinery. It trades about 0.21 of its potential returns per unit of risk. Woorim Machinery Co is currently generating about 0.05 per unit of risk. If you would invest 325,500 in Shinhan Inverse Silver on August 27, 2024 and sell it today you would earn a total of 26,500 from holding Shinhan Inverse Silver or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Woorim Machinery Co
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Woorim Machinery |
Shinhan Inverse and Woorim Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Woorim Machinery
The main advantage of trading using opposite Shinhan Inverse and Woorim Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Woorim Machinery 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 Woorim Machinery will offset losses from the drop in Woorim Machinery's long position.| Shinhan Inverse vs. Sangsin Energy Display | Shinhan Inverse vs. LG Display Co | Shinhan Inverse vs. Sunny Electronics Corp | Shinhan Inverse vs. Samji Electronics Co |
| Woorim Machinery vs. Samsung Electronics Co | Woorim Machinery vs. Samsung Electronics Co | Woorim Machinery vs. Hyundai Motor Co | Woorim Machinery vs. Hyundai Motor |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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