Correlation Between Shinhan WTI and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Daishin Balance 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 Daishin Balance 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 Daishin Balance No8, you can compare the effects of market volatilities on Shinhan WTI and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Daishin Balance.
Diversification Opportunities for Shinhan WTI and Daishin Balance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Daishin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Daishin Balance go up and down completely randomly.
Pair Corralation between Shinhan WTI and Daishin Balance
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.55 times more return on investment than Daishin Balance. However, Shinhan WTI Futures is 1.82 times less risky than Daishin Balance. It trades about 0.1 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about -0.47 per unit of risk. If you would invest 709,000 in Shinhan WTI Futures on August 27, 2024 and sell it today you would earn a total of 23,500 from holding Shinhan WTI Futures or generate 3.31% 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. Daishin Balance No8
Performance |
| Timeline |
| Shinhan WTI Futures |
| Daishin Balance No8 |
Shinhan WTI and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Daishin Balance
The main advantage of trading using opposite Shinhan WTI and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance'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 |
| Daishin Balance vs. Pureun Mutual Savings | Daishin Balance vs. Coloray International Investment | Daishin Balance vs. Cuckoo Homesys Co | Daishin Balance vs. Sangsangin Investment Securities |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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