Correlation Between Shinhan Inverse and MetaLabs
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on Shinhan Inverse and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and MetaLabs.
Diversification Opportunities for Shinhan Inverse and MetaLabs
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and MetaLabs is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and MetaLabs go up and down completely randomly.
Pair Corralation between Shinhan Inverse and MetaLabs
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.44 times more return on investment than MetaLabs. However, Shinhan Inverse Copper is 2.3 times less risky than MetaLabs. It trades about 0.21 of its potential returns per unit of risk. MetaLabs Co is currently generating about -0.27 per unit of risk. If you would invest 532,500 in Shinhan Inverse Copper on August 25, 2024 and sell it today you would earn a total of 33,500 from holding Shinhan Inverse Copper or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. MetaLabs Co
Performance |
| Timeline |
| Shinhan Inverse Copper |
| MetaLabs |
Shinhan Inverse and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and MetaLabs
The main advantage of trading using opposite Shinhan Inverse and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| Shinhan Inverse vs. J Steel Co | Shinhan Inverse vs. Hansol Homedeco Co | Shinhan Inverse vs. Dong A Steel Technology | Shinhan Inverse vs. Hankuk Steel Wire |
| MetaLabs vs. Seohee Construction Co | MetaLabs vs. Hanshin Construction Co | MetaLabs vs. Seoam Machinery Industry | MetaLabs vs. Daiyang 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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