Correlation Between Shinhan Inverse and Shinhan Leverage

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Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Shinhan Leverage 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 Shinhan Leverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse Dollar and Shinhan Leverage WTI, you can compare the effects of market volatilities on Shinhan Inverse and Shinhan Leverage 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 Shinhan Leverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Shinhan Leverage.

Diversification Opportunities for Shinhan Inverse and Shinhan Leverage

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Shinhan and Shinhan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Dollar and Shinhan Leverage WTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Leverage WTI 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 Dollar are associated (or correlated) with Shinhan Leverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Leverage WTI has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Shinhan Leverage go up and down completely randomly.

Pair Corralation between Shinhan Inverse and Shinhan Leverage

Assuming the 90 days trading horizon Shinhan Inverse Dollar is expected to under-perform the Shinhan Leverage. But the etf apears to be less risky and, when comparing its historical volatility, Shinhan Inverse Dollar is 6.64 times less risky than Shinhan Leverage. The etf trades about -0.59 of its potential returns per unit of risk. The Shinhan Leverage WTI is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  87,000  in Shinhan Leverage WTI on October 7, 2024 and sell it today you would earn a total of  13,500  from holding Shinhan Leverage WTI or generate 15.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.74%
ValuesDaily Returns

Shinhan Inverse Dollar  vs.  Shinhan Leverage WTI

 Performance 
       Timeline  
Shinhan Inverse Dollar 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shinhan Inverse Dollar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.
Shinhan Leverage WTI 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shinhan Leverage WTI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shinhan Leverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shinhan Inverse and Shinhan Leverage Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shinhan Inverse and Shinhan Leverage

The main advantage of trading using opposite Shinhan Inverse and Shinhan Leverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Shinhan Leverage 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 Shinhan Leverage will offset losses from the drop in Shinhan Leverage's long position.
The idea behind Shinhan Inverse Dollar and Shinhan Leverage WTI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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