Correlation Between Shinhan WTI and KIM KINDEX
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and KIM KINDEX 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 KIM KINDEX 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 KIM KINDEX Treasury, you can compare the effects of market volatilities on Shinhan WTI and KIM KINDEX 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 KIM KINDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and KIM KINDEX.
Diversification Opportunities for Shinhan WTI and KIM KINDEX
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and KIM is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and KIM KINDEX Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIM KINDEX Treasury 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 KIM KINDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIM KINDEX Treasury has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and KIM KINDEX go up and down completely randomly.
Pair Corralation between Shinhan WTI and KIM KINDEX
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 15.97 times more return on investment than KIM KINDEX. However, Shinhan WTI is 15.97 times more volatile than KIM KINDEX Treasury. It trades about 0.03 of its potential returns per unit of risk. KIM KINDEX Treasury is currently generating about 0.19 per unit of risk. If you would invest 655,500 in Shinhan WTI Futures on September 3, 2024 and sell it today you would earn a total of 59,500 from holding Shinhan WTI Futures or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.91% |
| Values | Daily Returns |
Shinhan WTI Futures vs. KIM KINDEX Treasury
Performance |
| Timeline |
| Shinhan WTI Futures |
| KIM KINDEX Treasury |
Shinhan WTI and KIM KINDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and KIM KINDEX
The main advantage of trading using opposite Shinhan WTI and KIM KINDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, KIM KINDEX 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 KIM KINDEX will offset losses from the drop in KIM KINDEX's long position.| Shinhan WTI vs. HB Technology TD | Shinhan WTI vs. Stic Investments | Shinhan WTI vs. Daol Investment Securities | Shinhan WTI vs. E Investment Development |
| KIM KINDEX vs. Busan Industrial Co | KIM KINDEX vs. Busan Ind | KIM KINDEX vs. Mirae Asset Daewoo | KIM KINDEX vs. UNISEM 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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