Correlation Between Shinhan WTI and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and NewFlex 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 NewFlex 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 NewFlex Technology Co, you can compare the effects of market volatilities on Shinhan WTI and NewFlex 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and NewFlex Technology.
Diversification Opportunities for Shinhan WTI and NewFlex Technology
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and NewFlex is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and NewFlex Technology go up and down completely randomly.
Pair Corralation between Shinhan WTI and NewFlex Technology
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.44 times more return on investment than NewFlex Technology. However, Shinhan WTI Futures is 2.3 times less risky than NewFlex Technology. It trades about 0.02 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about 0.01 per unit of risk. If you would invest 696,500 in Shinhan WTI Futures on November 27, 2024 and sell it today you would earn a total of 57,500 from holding Shinhan WTI Futures or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.12% |
| Values | Daily Returns |
Shinhan WTI Futures vs. NewFlex Technology Co
Performance |
| Timeline |
| Shinhan WTI Futures |
| NewFlex Technology |
Shinhan WTI and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and NewFlex Technology
The main advantage of trading using opposite Shinhan WTI and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, NewFlex 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 NewFlex Technology will offset losses from the drop in NewFlex Technology'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 |
| NewFlex Technology vs. Anam Electronics Co | NewFlex Technology vs. Sangshin Electronics Co | NewFlex Technology vs. MediaZen | NewFlex Technology vs. Jahwa Electronics Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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