Correlation Between Shinhan WTI and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Dongbang Ship 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 Dongbang Ship 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 Dongbang Ship Machinery, you can compare the effects of market volatilities on Shinhan WTI and Dongbang Ship 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 Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Dongbang Ship.
Diversification Opportunities for Shinhan WTI and Dongbang Ship
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Dongbang is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery 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 Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Dongbang Ship go up and down completely randomly.
Pair Corralation between Shinhan WTI and Dongbang Ship
Assuming the 90 days trading horizon Shinhan WTI is expected to generate 19.97 times less return on investment than Dongbang Ship. But when comparing it to its historical volatility, Shinhan WTI Futures is 1.6 times less risky than Dongbang Ship. It trades about 0.0 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 229,500 in Dongbang Ship Machinery on September 1, 2024 and sell it today you would earn a total of 51,500 from holding Dongbang Ship Machinery or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.8% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Shinhan WTI Futures |
| Dongbang Ship Machinery |
Shinhan WTI and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Dongbang Ship
The main advantage of trading using opposite Shinhan WTI and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Shinhan WTI vs. Kaonmedia Co | Shinhan WTI vs. YG Entertainment | Shinhan WTI vs. Dongil Metal Co | Shinhan WTI vs. DONGKUK TED METAL |
| Dongbang Ship vs. Korea New Network | Dongbang Ship vs. ICD Co | Dongbang Ship vs. DYPNF CoLtd | Dongbang Ship vs. Busan Industrial 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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