Correlation Between Shinhan Inverse and Home Center
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Home Center 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 Home Center 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 Home Center Holdings, you can compare the effects of market volatilities on Shinhan Inverse and Home Center 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 Home Center. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Home Center.
Diversification Opportunities for Shinhan Inverse and Home Center
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Home is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Home Center Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Center Holdings 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 Home Center. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Center Holdings has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Home Center go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Home Center
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.67 times more return on investment than Home Center. However, Shinhan Inverse Copper is 1.48 times less risky than Home Center. It trades about 0.01 of its potential returns per unit of risk. Home Center Holdings is currently generating about -0.04 per unit of risk. If you would invest 573,000 in Shinhan Inverse Copper on September 4, 2024 and sell it today you would lose (4,000) from holding Shinhan Inverse Copper or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.86% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. Home Center Holdings
Performance |
| Timeline |
| Shinhan Inverse Copper |
| Home Center Holdings |
Shinhan Inverse and Home Center Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Home Center
The main advantage of trading using opposite Shinhan Inverse and Home Center positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Home Center 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 Home Center will offset losses from the drop in Home Center's long position.| Shinhan Inverse vs. HJ ShipBuilding Construction | Shinhan Inverse vs. Semyung Electric Machinery | Shinhan Inverse vs. ENERGYMACHINERY KOREA CoLtd | Shinhan Inverse vs. Pureun Mutual Savings |
| Home Center vs. Shinhan Inverse Copper | Home Center vs. Kbi Metal Co | Home Center vs. Taeyang Metal Industrial | Home Center vs. GS Retail Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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