Correlation Between Shinhan WTI and Aniplus
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Aniplus 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 Aniplus 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 Aniplus, you can compare the effects of market volatilities on Shinhan WTI and Aniplus 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 Aniplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Aniplus.
Diversification Opportunities for Shinhan WTI and Aniplus
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinhan and Aniplus is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Aniplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aniplus 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 Aniplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aniplus has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Aniplus go up and down completely randomly.
Pair Corralation between Shinhan WTI and Aniplus
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.74 times more return on investment than Aniplus. However, Shinhan WTI Futures is 1.35 times less risky than Aniplus. It trades about 0.03 of its potential returns per unit of risk. Aniplus is currently generating about -0.05 per unit of risk. If you would invest 665,500 in Shinhan WTI Futures on September 4, 2024 and sell it today you would earn a total of 49,500 from holding Shinhan WTI Futures or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.91% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Aniplus
Performance |
| Timeline |
| Shinhan WTI Futures |
| Aniplus |
Shinhan WTI and Aniplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Aniplus
The main advantage of trading using opposite Shinhan WTI and Aniplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Aniplus 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 Aniplus will offset losses from the drop in Aniplus' long position.| Shinhan WTI vs. DB Financial Investment | Shinhan WTI vs. Total Soft Bank | Shinhan WTI vs. Moadata Co | Shinhan WTI vs. Jeju Bank |
| Aniplus vs. Lotte Data Communication | Aniplus vs. Ssangyong Information Communication | Aniplus vs. Hankuk Steel Wire | Aniplus vs. Shin Steel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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