Correlation Between Shinhan WTI and People Technology
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and People 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 People 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 People Technology, you can compare the effects of market volatilities on Shinhan WTI and People 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and People Technology.
Diversification Opportunities for Shinhan WTI and People Technology
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and People is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and People Technology go up and down completely randomly.
Pair Corralation between Shinhan WTI and People Technology
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.59 times more return on investment than People Technology. However, Shinhan WTI Futures is 1.7 times less risky than People Technology. It trades about 0.35 of its potential returns per unit of risk. People Technology is currently generating about 0.0 per unit of risk. If you would invest 740,000 in Shinhan WTI Futures on October 18, 2024 and sell it today you would earn a total of 79,500 from holding Shinhan WTI Futures or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan WTI Futures vs. People Technology
Performance |
| Timeline |
| Shinhan WTI Futures |
| People Technology |
Shinhan WTI and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and People Technology
The main advantage of trading using opposite Shinhan WTI and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, People 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 People Technology will offset losses from the drop in People Technology'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 |
| People Technology vs. SEOJEON ELECTRIC MACHINERY | People Technology vs. YG Entertainment | People Technology vs. Daewon Media Co | People Technology vs. Nam Hwa Construction |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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