Correlation Between Shinhan WTI and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse WTI, you can compare the effects of market volatilities on Shinhan WTI and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Shinhan Inverse.
Diversification Opportunities for Shinhan WTI and Shinhan Inverse
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Shinhan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Shinhan Inverse WTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse WTI 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse WTI has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Shinhan WTI and Shinhan Inverse
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to under-perform the Shinhan Inverse. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan WTI Futures is 1.01 times less risky than Shinhan Inverse. The stock trades about -0.01 of its potential returns per unit of risk. The Shinhan Inverse WTI is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 269,500 in Shinhan Inverse WTI on August 24, 2024 and sell it today you would earn a total of 10,000 from holding Shinhan Inverse WTI or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.32% |
| Values | Daily Returns |
Shinhan WTI Futures vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Shinhan WTI Futures |
| Shinhan Inverse WTI |
Shinhan WTI and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and Shinhan Inverse
The main advantage of trading using opposite Shinhan WTI and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Shinhan WTI vs. Youngbo Chemical Co | Shinhan WTI vs. Tway Air Co | Shinhan WTI vs. Korea Petro Chemical | Shinhan WTI vs. CJ Seafood Corp |
| Shinhan Inverse vs. Sam Yang Foods | Shinhan Inverse vs. Lion Chemtech Co | Shinhan Inverse vs. Intellian Technologies | Shinhan Inverse vs. FoodNamoo |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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