Correlation Between Shinhan WTI and Eugene Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Eugene 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 Eugene 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 Eugene Technology CoLtd, you can compare the effects of market volatilities on Shinhan WTI and Eugene 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 Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Eugene Technology.
Diversification Opportunities for Shinhan WTI and Eugene Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Eugene is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology 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 Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Eugene Technology go up and down completely randomly.
Pair Corralation between Shinhan WTI and Eugene Technology
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.53 times more return on investment than Eugene Technology. However, Shinhan WTI Futures is 1.9 times less risky than Eugene Technology. It trades about 0.0 of its potential returns per unit of risk. Eugene Technology CoLtd is currently generating about -0.07 per unit of risk. If you would invest 739,500 in Shinhan WTI Futures on September 1, 2024 and sell it today you would lose (18,000) from holding Shinhan WTI Futures or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.54% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Eugene Technology CoLtd
Performance |
| Timeline |
| Shinhan WTI Futures |
| Eugene Technology CoLtd |
Shinhan WTI and Eugene Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Eugene Technology
The main advantage of trading using opposite Shinhan WTI and Eugene Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Eugene 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 Eugene Technology will offset losses from the drop in Eugene Technology's long position.| Shinhan WTI vs. Kaonmedia Co | Shinhan WTI vs. YG Entertainment | Shinhan WTI vs. Dongil Metal Co | Shinhan WTI vs. DONGKUK TED METAL |
| Eugene Technology vs. Dongsin Engineering Construction | Eugene Technology vs. Doosan Fuel Cell | Eugene Technology vs. Daishin Balance 1 | Eugene 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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