Correlation Between Shinhan Inverse and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Shinhan Inverse and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Daejung Chemicals.
Diversification Opportunities for Shinhan Inverse and Daejung Chemicals
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Daejung is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Daejung Chemicals
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.96 times more return on investment than Daejung Chemicals. However, Shinhan Inverse Copper is 1.04 times less risky than Daejung Chemicals. It trades about -0.02 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.08 per unit of risk. If you would invest 608,500 in Shinhan Inverse Copper on September 2, 2024 and sell it today you would lose (43,500) from holding Shinhan Inverse Copper or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.58% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Shinhan Inverse Copper |
| Daejung Chemicals Metals |
Shinhan Inverse and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Daejung Chemicals
The main advantage of trading using opposite Shinhan Inverse and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Shinhan Inverse vs. Woorim Machinery Co | Shinhan Inverse vs. SK Chemicals Co | Shinhan Inverse vs. Samick Musical Instruments | Shinhan Inverse vs. KEPCO Engineering Construction |
| Daejung Chemicals vs. Miwon Chemicals Co | Daejung Chemicals vs. Display Tech Co | Daejung Chemicals vs. Sung Bo Chemicals | Daejung Chemicals vs. Iljin 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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