Correlation Between Shinhan Inverse and Hironic

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Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Hironic 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 Hironic 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 Hironic Co, you can compare the effects of market volatilities on Shinhan Inverse and Hironic 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 Hironic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Hironic.

Diversification Opportunities for Shinhan Inverse and Hironic

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Shinhan and Hironic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Hironic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hironic 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 Hironic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hironic has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Hironic go up and down completely randomly.

Pair Corralation between Shinhan Inverse and Hironic

Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to generate 0.52 times more return on investment than Hironic. However, Shinhan Inverse Silver is 1.94 times less risky than Hironic. It trades about -0.02 of its potential returns per unit of risk. Hironic Co is currently generating about -0.12 per unit of risk. If you would invest  357,000  in Shinhan Inverse Silver on October 16, 2024 and sell it today you would lose (2,500) from holding Shinhan Inverse Silver or give up 0.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shinhan Inverse Silver  vs.  Hironic Co

 Performance 
       Timeline  
Shinhan Inverse Silver 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Inverse Silver are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shinhan Inverse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hironic 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hironic Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Shinhan Inverse and Hironic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shinhan Inverse and Hironic

The main advantage of trading using opposite Shinhan Inverse and Hironic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Hironic 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 Hironic will offset losses from the drop in Hironic's long position.
The idea behind Shinhan Inverse Silver and Hironic Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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