Correlation Between Shinhan WTI and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and LabGenomics 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 LabGenomics 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 LabGenomics Co, you can compare the effects of market volatilities on Shinhan WTI and LabGenomics 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 LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and LabGenomics.
Diversification Opportunities for Shinhan WTI and LabGenomics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and LabGenomics is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics 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 LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and LabGenomics go up and down completely randomly.
Pair Corralation between Shinhan WTI and LabGenomics
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to under-perform the LabGenomics. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan WTI Futures is 2.8 times less risky than LabGenomics. The stock trades about -0.01 of its potential returns per unit of risk. The LabGenomics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 251,000 in LabGenomics Co on August 29, 2024 and sell it today you would earn a total of 20,000 from holding LabGenomics Co or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Shinhan WTI Futures vs. LabGenomics Co
Performance |
| Timeline |
| Shinhan WTI Futures |
| LabGenomics |
Shinhan WTI and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and LabGenomics
The main advantage of trading using opposite Shinhan WTI and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' 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 |
| LabGenomics vs. Lotte Non Life Insurance | LabGenomics vs. Clean Science co | LabGenomics vs. SS TECH | LabGenomics vs. DB Financial Investment |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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