Correlation Between Shinhan WTI and Samsung Asset
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Samsung Asset 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 Samsung Asset 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 Samsung Asset Management, you can compare the effects of market volatilities on Shinhan WTI and Samsung Asset 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 Samsung Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Samsung Asset.
Diversification Opportunities for Shinhan WTI and Samsung Asset
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinhan and Samsung is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Samsung Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Asset Management 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 Samsung Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Asset Management has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Samsung Asset go up and down completely randomly.
Pair Corralation between Shinhan WTI and Samsung Asset
Assuming the 90 days trading horizon Shinhan WTI is expected to generate 2.08 times less return on investment than Samsung Asset. In addition to that, Shinhan WTI is 1.49 times more volatile than Samsung Asset Management. It trades about 0.03 of its total potential returns per unit of risk. Samsung Asset Management is currently generating about 0.09 per unit of volatility. If you would invest 1,282,312 in Samsung Asset Management on September 3, 2024 and sell it today you would earn a total of 359,688 from holding Samsung Asset Management or generate 28.05% 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. Samsung Asset Management
Performance |
| Timeline |
| Shinhan WTI Futures |
| Samsung Asset Management |
Shinhan WTI and Samsung Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Samsung Asset
The main advantage of trading using opposite Shinhan WTI and Samsung Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Samsung Asset 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 Samsung Asset will offset losses from the drop in Samsung Asset's long position.| Shinhan WTI vs. HB Technology TD | Shinhan WTI vs. Stic Investments | Shinhan WTI vs. Daol Investment Securities | Shinhan WTI vs. E Investment Development |
| Samsung Asset vs. Samsung KODEX IT | Samsung Asset vs. Samsung KODEX Machinary | Samsung Asset vs. Samsung KODEX Samsung | Samsung Asset vs. Samsung KODEX Copper |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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