Correlation Between Shinhan WTI and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Shinhan WTI and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and GemVaxKAEL CoLtd.
Diversification Opportunities for Shinhan WTI and GemVaxKAEL CoLtd
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and GemVaxKAEL is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Shinhan WTI and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan WTI Futures is 4.08 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.13 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 1,887,000 in GemVaxKAEL CoLtd on November 27, 2024 and sell it today you would earn a total of 1,588,000 from holding GemVaxKAEL CoLtd or generate 84.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Shinhan WTI Futures vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Shinhan WTI Futures |
| GemVaxKAEL CoLtd |
Shinhan WTI and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and GemVaxKAEL CoLtd
The main advantage of trading using opposite Shinhan WTI and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Shinhan WTI vs. Cots Technology Co | Shinhan WTI vs. Kukil Metal Co | Shinhan WTI vs. Daejung Chemicals Metals | Shinhan WTI vs. MS Autotech CoLtd |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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