Correlation Between Shinhan WTI and Insung Information
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Shinhan WTI and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Insung Information.
Diversification Opportunities for Shinhan WTI and Insung Information
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Insung is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Insung Information go up and down completely randomly.
Pair Corralation between Shinhan WTI and Insung Information
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.69 times more return on investment than Insung Information. However, Shinhan WTI Futures is 1.45 times less risky than Insung Information. It trades about 0.01 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.1 per unit of risk. If you would invest 769,000 in Shinhan WTI Futures on November 28, 2024 and sell it today you would lose (5,500) from holding Shinhan WTI Futures or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.13% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Insung Information Co
Performance |
| Timeline |
| Shinhan WTI Futures |
| Insung Information |
Shinhan WTI and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Insung Information
The main advantage of trading using opposite Shinhan WTI and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Shinhan WTI vs. Husteel | Shinhan WTI vs. Wonil Special Steel | Shinhan WTI vs. ADTechnology CoLtd | Shinhan WTI vs. Dongil Steel Co |
| Insung Information vs. Eagon Industrial Co | Insung Information vs. Seoyon Topmetal Co | Insung Information vs. Dongil Metal Co | Insung Information vs. LEENO Industrial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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