Correlation Between Shinhan WTI and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Sangsin Energy 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 Sangsin Energy 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 Sangsin Energy Display, you can compare the effects of market volatilities on Shinhan WTI and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Sangsin Energy.
Diversification Opportunities for Shinhan WTI and Sangsin Energy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and Sangsin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Sangsin Energy go up and down completely randomly.
Pair Corralation between Shinhan WTI and Sangsin Energy
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.31 times more return on investment than Sangsin Energy. However, Shinhan WTI Futures is 3.22 times less risky than Sangsin Energy. It trades about 0.05 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.04 per unit of risk. If you would invest 722,500 in Shinhan WTI Futures on September 27, 2024 and sell it today you would earn a total of 9,000 from holding Shinhan WTI Futures or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Sangsin Energy Display
Performance |
| Timeline |
| Shinhan WTI Futures |
| Sangsin Energy Display |
Shinhan WTI and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Sangsin Energy
The main advantage of trading using opposite Shinhan WTI and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. LG Energy Solution | Shinhan WTI vs. SK Hynix |
| Sangsin Energy vs. Korean Drug Co | Sangsin Energy vs. KTB Investment Securities | Sangsin Energy vs. Nh Investment And | Sangsin Energy vs. Sangsangin Investment Securities |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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