Correlation Between Shinhan Dollar and ACE 10Y
Can any of the company-specific risk be diversified away by investing in both Shinhan Dollar and ACE 10Y 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 Dollar and ACE 10Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Dollar Index and ACE 10Y KTB, you can compare the effects of market volatilities on Shinhan Dollar and ACE 10Y 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 Dollar with a short position of ACE 10Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Dollar and ACE 10Y.
Diversification Opportunities for Shinhan Dollar and ACE 10Y
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinhan and ACE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Dollar Index and ACE 10Y KTB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACE 10Y KTB and Shinhan Dollar 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 Dollar Index are associated (or correlated) with ACE 10Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACE 10Y KTB has no effect on the direction of Shinhan Dollar i.e., Shinhan Dollar and ACE 10Y go up and down completely randomly.
Pair Corralation between Shinhan Dollar and ACE 10Y
Assuming the 90 days trading horizon Shinhan Dollar Index is expected to generate 1.38 times more return on investment than ACE 10Y. However, Shinhan Dollar is 1.38 times more volatile than ACE 10Y KTB. It trades about 0.1 of its potential returns per unit of risk. ACE 10Y KTB is currently generating about 0.05 per unit of risk. If you would invest 1,177,000 in Shinhan Dollar Index on November 2, 2024 and sell it today you would earn a total of 183,000 from holding Shinhan Dollar Index or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.53% |
| Values | Daily Returns |
Shinhan Dollar Index vs. ACE 10Y KTB
Performance |
| Timeline |
| Shinhan Dollar Index |
| ACE 10Y KTB |
Shinhan Dollar and ACE 10Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Dollar and ACE 10Y
The main advantage of trading using opposite Shinhan Dollar and ACE 10Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Dollar position performs unexpectedly, ACE 10Y 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 ACE 10Y will offset losses from the drop in ACE 10Y's long position.| Shinhan Dollar vs. Shinhan Inverse Dollar | Shinhan Dollar vs. Shinhan BNP Paribas | Shinhan Dollar vs. Shinhan Copper Futures | Shinhan Dollar vs. Shinhan Gold Futures |
| ACE 10Y vs. ACE KRX Physical | ACE 10Y vs. ACE NASDAQ100 3070 | ACE 10Y vs. ACE EV Value | ACE 10Y vs. ACE NVIDIA30 Blend |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |