Correlation Between Shinhan WTI and Hanwha ARIRANG
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Hanwha ARIRANG 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 Hanwha ARIRANG 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 Hanwha ARIRANG KTB, you can compare the effects of market volatilities on Shinhan WTI and Hanwha ARIRANG 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 Hanwha ARIRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Hanwha ARIRANG.
Diversification Opportunities for Shinhan WTI and Hanwha ARIRANG
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Hanwha is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Hanwha ARIRANG KTB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha ARIRANG KTB 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 Hanwha ARIRANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha ARIRANG KTB has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Hanwha ARIRANG go up and down completely randomly.
Pair Corralation between Shinhan WTI and Hanwha ARIRANG
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to under-perform the Hanwha ARIRANG. In addition to that, Shinhan WTI is 7.05 times more volatile than Hanwha ARIRANG KTB. It trades about -0.16 of its total potential returns per unit of risk. Hanwha ARIRANG KTB is currently generating about 0.22 per unit of volatility. If you would invest 5,615,000 in Hanwha ARIRANG KTB on November 29, 2024 and sell it today you would earn a total of 55,500 from holding Hanwha ARIRANG KTB or generate 0.99% 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. Hanwha ARIRANG KTB
Performance |
| Timeline |
| Shinhan WTI Futures |
| Hanwha ARIRANG KTB |
Shinhan WTI and Hanwha ARIRANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Hanwha ARIRANG
The main advantage of trading using opposite Shinhan WTI and Hanwha ARIRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Hanwha ARIRANG 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 Hanwha ARIRANG will offset losses from the drop in Hanwha ARIRANG's long position.| Shinhan WTI vs. Sempio Foods Co | Shinhan WTI vs. Heungkuk Metaltech CoLtd | Shinhan WTI vs. MetaLabs Co | Shinhan WTI vs. Shinhan Inverse Copper |
| Hanwha ARIRANG vs. Busan Industrial Co | Hanwha ARIRANG vs. Mirae Asset Daewoo | Hanwha ARIRANG vs. RPBio Inc | Hanwha ARIRANG vs. Finebesteel |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |