Correlation Between Shinhan WTI and DB Financial
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and DB Financial 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 WTI and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan WTI Futures and DB Financial Investment, you can compare the effects of market volatilities on Shinhan WTI and DB Financial 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 WTI with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and DB Financial.
Diversification Opportunities for Shinhan WTI and DB Financial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and 016610 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Shinhan WTI 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 WTI Futures are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and DB Financial go up and down completely randomly.
Pair Corralation between Shinhan WTI and DB Financial
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.83 times more return on investment than DB Financial. However, Shinhan WTI Futures is 1.21 times less risky than DB Financial. It trades about 0.05 of its potential returns per unit of risk. DB Financial Investment is currently generating about -0.07 per unit of risk. If you would invest 687,500 in Shinhan WTI Futures on September 12, 2024 and sell it today you would earn a total of 33,000 from holding Shinhan WTI Futures or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Shinhan WTI Futures vs. DB Financial Investment
Performance |
| Timeline |
| Shinhan WTI Futures |
| DB Financial Investment |
Shinhan WTI and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and DB Financial
The main advantage of trading using opposite Shinhan WTI and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| Shinhan WTI vs. Shinhan Financial Group | Shinhan WTI vs. Cuckoo Homesys Co | Shinhan WTI vs. Jb Financial | Shinhan WTI vs. LG Household Healthcare |
| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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