Correlation Between Shinhan WTI and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Puloon 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 Puloon 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 Puloon Technology, you can compare the effects of market volatilities on Shinhan WTI and Puloon 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Puloon Technology.
Diversification Opportunities for Shinhan WTI and Puloon Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Puloon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Puloon Technology go up and down completely randomly.
Pair Corralation between Shinhan WTI and Puloon Technology
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.71 times more return on investment than Puloon Technology. However, Shinhan WTI Futures is 1.4 times less risky than Puloon Technology. It trades about 0.06 of its potential returns per unit of risk. Puloon Technology is currently generating about -0.07 per unit of risk. If you would invest 709,000 in Shinhan WTI Futures on August 29, 2024 and sell it today you would earn a total of 13,500 from holding Shinhan WTI Futures or generate 1.9% 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. Puloon Technology
Performance |
| Timeline |
| Shinhan WTI Futures |
| Puloon Technology |
Shinhan WTI and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Puloon Technology
The main advantage of trading using opposite Shinhan WTI and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Puloon 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 Puloon Technology will offset losses from the drop in Puloon Technology's 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 |
| Puloon Technology vs. Daou Data Corp | Puloon Technology vs. Busan Industrial Co | Puloon Technology vs. Busan Ind | Puloon Technology vs. Shinhan WTI Futures |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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