Correlation Between Shinhan Inverse and Formetal
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Shinhan Inverse and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Formetal.
Diversification Opportunities for Shinhan Inverse and Formetal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Formetal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Formetal go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Formetal
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to under-perform the Formetal. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Inverse Silver is 2.9 times less risky than Formetal. The stock trades about -0.12 of its potential returns per unit of risk. The Formetal Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 267,500 in Formetal Co on September 14, 2024 and sell it today you would earn a total of 71,000 from holding Formetal Co or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Formetal Co
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Formetal |
Shinhan Inverse and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Formetal
The main advantage of trading using opposite Shinhan Inverse and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Shinhan Inverse vs. PJ Metal Co | Shinhan Inverse vs. Polaris Office Corp | Shinhan Inverse vs. Sempio Foods Co | Shinhan Inverse vs. Korea Alcohol Industrial |
| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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