Correlation Between Shinhan Inverse and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on Shinhan Inverse and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Konan Technology.
Diversification Opportunities for Shinhan Inverse and Konan Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Konan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Konan Technology go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Konan Technology
Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to generate 0.22 times more return on investment than Konan Technology. However, Shinhan Inverse Copper is 4.47 times less risky than Konan Technology. It trades about -0.17 of its potential returns per unit of risk. Konan Technology is currently generating about -0.04 per unit of risk. If you would invest 561,500 in Shinhan Inverse Copper on October 17, 2024 and sell it today you would lose (21,000) from holding Shinhan Inverse Copper or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Shinhan Inverse Copper vs. Konan Technology
Performance |
| Timeline |
| Shinhan Inverse Copper |
| Konan Technology |
Shinhan Inverse and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Konan Technology
The main advantage of trading using opposite Shinhan Inverse and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Shinhan Inverse vs. TJ media Co | Shinhan Inverse vs. SKONEC Entertainment Co | Shinhan Inverse vs. Seoul Electronics Telecom | Shinhan Inverse vs. Samji Electronics Co |
| Konan Technology vs. Shinhan Inverse Copper | Konan Technology vs. Sempio Foods Co | Konan Technology vs. Wireless Power Amplifier | Konan Technology vs. Samyang Foods 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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