Correlation Between Shinhan WTI and HB Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on Shinhan WTI and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and HB Technology.
Diversification Opportunities for Shinhan WTI and HB Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and 078150 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and HB Technology go up and down completely randomly.
Pair Corralation between Shinhan WTI and HB Technology
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.47 times more return on investment than HB Technology. However, Shinhan WTI Futures is 2.15 times less risky than HB Technology. It trades about -0.07 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.28 per unit of risk. If you would invest 733,500 in Shinhan WTI Futures on September 4, 2024 and sell it today you would lose (18,500) from holding Shinhan WTI Futures or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan WTI Futures vs. HB Technology TD
Performance |
| Timeline |
| Shinhan WTI Futures |
| HB Technology TD |
Shinhan WTI and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and HB Technology
The main advantage of trading using opposite Shinhan WTI and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Shinhan WTI vs. DB Financial Investment | Shinhan WTI vs. Total Soft Bank | Shinhan WTI vs. Moadata Co | Shinhan WTI vs. Jeju Bank |
| HB Technology vs. Dongsin Engineering Construction | HB Technology vs. Doosan Fuel Cell | HB Technology vs. Daishin Balance 1 | HB Technology vs. Total Soft Bank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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