Correlation Between Shinhan WTI and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Samji Electronics 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 Samji Electronics 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 Samji Electronics Co, you can compare the effects of market volatilities on Shinhan WTI and Samji Electronics 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 Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Samji Electronics.
Diversification Opportunities for Shinhan WTI and Samji Electronics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Samji is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics 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 Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Samji Electronics go up and down completely randomly.
Pair Corralation between Shinhan WTI and Samji Electronics
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 1.93 times more return on investment than Samji Electronics. However, Shinhan WTI is 1.93 times more volatile than Samji Electronics Co. It trades about 0.06 of its potential returns per unit of risk. Samji Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 709,000 in Shinhan WTI Futures on August 29, 2024 and sell it today you would earn a total of 13,500 from holding Shinhan WTI Futures or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Samji Electronics Co
Performance |
| Timeline |
| Shinhan WTI Futures |
| Samji Electronics |
Shinhan WTI and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Samji Electronics
The main advantage of trading using opposite Shinhan WTI and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Samji Electronics 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| Shinhan WTI vs. Lotte Chilsung Beverage | Shinhan WTI vs. Kukil Metal Co | Shinhan WTI vs. Kbi Metal Co | Shinhan WTI vs. PJ Metal Co |
| Samji Electronics vs. Daou Data Corp | Samji Electronics vs. Busan Industrial Co | Samji Electronics vs. Busan Ind | Samji Electronics vs. Shinhan WTI Futures |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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