Correlation Between Shinhan WTI and Moadata
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Moadata 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 Moadata 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 Moadata Co, you can compare the effects of market volatilities on Shinhan WTI and Moadata 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 Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Moadata.
Diversification Opportunities for Shinhan WTI and Moadata
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Moadata is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata 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 Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Moadata go up and down completely randomly.
Pair Corralation between Shinhan WTI and Moadata
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.5 times more return on investment than Moadata. However, Shinhan WTI Futures is 2.01 times less risky than Moadata. It trades about -0.08 of its potential returns per unit of risk. Moadata Co is currently generating about -0.07 per unit of risk. If you would invest 783,500 in Shinhan WTI Futures on November 28, 2024 and sell it today you would lose (20,000) from holding Shinhan WTI Futures or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Moadata Co
Performance |
| Timeline |
| Shinhan WTI Futures |
| Moadata |
Shinhan WTI and Moadata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Moadata
The main advantage of trading using opposite Shinhan WTI and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Moadata 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 Moadata will offset losses from the drop in Moadata's long position.| Shinhan WTI vs. Husteel | Shinhan WTI vs. Wonil Special Steel | Shinhan WTI vs. ADTechnology CoLtd | Shinhan WTI vs. Dongil Steel Co |
| Moadata vs. Nasmedia Co | Moadata vs. Lotte Fine Chemical | Moadata vs. Kaonmedia Co | Moadata vs. MEDIANA CoLtd |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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