Correlation Between Shinhan Inverse and Grand Korea
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Grand Korea 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 Grand Korea 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 Grand Korea Leisure, you can compare the effects of market volatilities on Shinhan Inverse and Grand Korea 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 Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Grand Korea.
Diversification Opportunities for Shinhan Inverse and Grand Korea
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and Grand is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Grand Korea Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Korea Leisure 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 Grand Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Korea Leisure has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Grand Korea go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Grand Korea
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to generate 1.22 times more return on investment than Grand Korea. However, Shinhan Inverse is 1.22 times more volatile than Grand Korea Leisure. It trades about -0.03 of its potential returns per unit of risk. Grand Korea Leisure is currently generating about -0.05 per unit of risk. If you would invest 399,000 in Shinhan Inverse Silver on September 3, 2024 and sell it today you would lose (43,500) from holding Shinhan Inverse Silver or give up 10.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.11% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Grand Korea Leisure
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Grand Korea Leisure |
Shinhan Inverse and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Grand Korea
The main advantage of trading using opposite Shinhan Inverse and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Grand Korea 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 Grand Korea will offset losses from the drop in Grand Korea's long position.| Shinhan Inverse vs. Seah Steel Corp | Shinhan Inverse vs. Clean Science co | Shinhan Inverse vs. Netmarble Games Corp | Shinhan Inverse vs. Dongbu Steel Co |
| Grand Korea vs. Busan Industrial Co | Grand Korea vs. UNISEM Co | Grand Korea vs. RPBio Inc | Grand Korea vs. Finebesteel |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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