Correlation Between Shinhan Inverse and Cherrybro CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Cherrybro CoLtd 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 Cherrybro CoLtd 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 Cherrybro coLtd, you can compare the effects of market volatilities on Shinhan Inverse and Cherrybro CoLtd 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 Cherrybro CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Cherrybro CoLtd.
Diversification Opportunities for Shinhan Inverse and Cherrybro CoLtd
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Cherrybro is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Cherrybro coLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherrybro coLtd 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 Cherrybro CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherrybro coLtd has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Cherrybro CoLtd go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Cherrybro CoLtd
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.58 times more return on investment than Cherrybro CoLtd. However, Shinhan Inverse Copper is 1.72 times less risky than Cherrybro CoLtd. It trades about -0.02 of its potential returns per unit of risk. Cherrybro coLtd is currently generating about -0.08 per unit of risk. If you would invest 591,500 in Shinhan Inverse Copper on September 14, 2024 and sell it today you would lose (45,000) from holding Shinhan Inverse Copper or give up 7.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.78% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. Cherrybro coLtd
Performance |
| Timeline |
| Shinhan Inverse Copper |
| Cherrybro coLtd |
Shinhan Inverse and Cherrybro CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Cherrybro CoLtd
The main advantage of trading using opposite Shinhan Inverse and Cherrybro CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Cherrybro CoLtd 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 Cherrybro CoLtd will offset losses from the drop in Cherrybro CoLtd's long position.| Shinhan Inverse vs. FoodNamoo | Shinhan Inverse vs. FOODWELL Co | Shinhan Inverse vs. SS TECH | Shinhan Inverse vs. Cots Technology Co |
| Cherrybro CoLtd vs. Formetal Co | Cherrybro CoLtd vs. Samhwa Paint Industrial | Cherrybro CoLtd vs. Seoyon Topmetal Co | Cherrybro CoLtd vs. Dongwon Metal 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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