Correlation Between Shinhan WTI and Seegene
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Seegene 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 Seegene 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 Seegene, you can compare the effects of market volatilities on Shinhan WTI and Seegene 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 Seegene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Seegene.
Diversification Opportunities for Shinhan WTI and Seegene
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Seegene is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Seegene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seegene 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 Seegene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seegene has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Seegene go up and down completely randomly.
Pair Corralation between Shinhan WTI and Seegene
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.74 times more return on investment than Seegene. However, Shinhan WTI Futures is 1.35 times less risky than Seegene. It trades about 0.02 of its potential returns per unit of risk. Seegene is currently generating about -0.01 per unit of risk. If you would invest 729,500 in Shinhan WTI Futures on August 25, 2024 and sell it today you would earn a total of 3,000 from holding Shinhan WTI Futures or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Seegene
Performance |
| Timeline |
| Shinhan WTI Futures |
| Seegene |
Shinhan WTI and Seegene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Seegene
The main advantage of trading using opposite Shinhan WTI and Seegene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Seegene 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 Seegene will offset losses from the drop in Seegene'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 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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