Correlation Between Shinhan Inverse and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Seoul Electronics 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 Seoul Electronics 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 Seoul Electronics Telecom, you can compare the effects of market volatilities on Shinhan Inverse and Seoul Electronics 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 Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Seoul Electronics.
Diversification Opportunities for Shinhan Inverse and Seoul Electronics
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Seoul is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom 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 Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Seoul Electronics go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Seoul Electronics
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.46 times more return on investment than Seoul Electronics. However, Shinhan Inverse Copper is 2.15 times less risky than Seoul Electronics. It trades about 0.01 of its potential returns per unit of risk. Seoul Electronics Telecom is currently generating about -0.05 per unit of risk. If you would invest 521,000 in Shinhan Inverse Copper on October 12, 2024 and sell it today you would earn a total of 21,500 from holding Shinhan Inverse Copper or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.43% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. Seoul Electronics Telecom
Performance |
| Timeline |
| Shinhan Inverse Copper |
| Seoul Electronics Telecom |
Shinhan Inverse and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Seoul Electronics
The main advantage of trading using opposite Shinhan Inverse and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| Shinhan Inverse vs. Nh Investment And | Shinhan Inverse vs. Daishin Information Communications | Shinhan Inverse vs. E Investment Development | Shinhan Inverse vs. KTB Investment Securities |
| Seoul Electronics vs. Hanjin Transportation Co | Seoul Electronics vs. Shinhan Inverse Copper | Seoul Electronics vs. Formetal Co | Seoul Electronics vs. Taegu Broadcasting |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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