Correlation Between Shinhan Inverse and COWAY
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and COWAY 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 COWAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse Copper and COWAY Co, you can compare the effects of market volatilities on Shinhan Inverse and COWAY 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 COWAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and COWAY.
Diversification Opportunities for Shinhan Inverse and COWAY
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and COWAY is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and COWAY Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWAY 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 Copper are associated (or correlated) with COWAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWAY has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and COWAY go up and down completely randomly.
Pair Corralation between Shinhan Inverse and COWAY
Assuming the 90 days trading horizon Shinhan Inverse is expected to generate 3.27 times less return on investment than COWAY. But when comparing it to its historical volatility, Shinhan Inverse Copper is 1.63 times less risky than COWAY. It trades about 0.01 of its potential returns per unit of risk. COWAY Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,590,000 in COWAY Co on September 1, 2024 and sell it today you would earn a total of 1,000,000 from holding COWAY Co or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.49% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. COWAY Co
Performance |
| Timeline |
| Shinhan Inverse Copper |
| COWAY |
Shinhan Inverse and COWAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and COWAY
The main advantage of trading using opposite Shinhan Inverse and COWAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, COWAY 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 COWAY will offset losses from the drop in COWAY's long position.| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
| COWAY vs. Inzi Display CoLtd | COWAY vs. Hyunwoo Industrial Co | COWAY vs. Songwon Industrial Co | COWAY vs. Sangsin Energy Display |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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