Correlation Between New Perspective and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both New Perspective and Shinhan WTI 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 New Perspective and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Shinhan WTI Futures, you can compare the effects of market volatilities on New Perspective and Shinhan WTI 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 New Perspective with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Shinhan WTI.
Diversification Opportunities for New Perspective and Shinhan WTI
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Shinhan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures and New Perspective 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 New Perspective Fund are associated (or correlated) with Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of New Perspective i.e., New Perspective and Shinhan WTI go up and down completely randomly.
Pair Corralation between New Perspective and Shinhan WTI
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.47 times more return on investment than Shinhan WTI. However, New Perspective Fund is 2.11 times less risky than Shinhan WTI. It trades about 0.21 of its potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.06 per unit of risk. If you would invest 6,264 in New Perspective Fund on November 4, 2024 and sell it today you would earn a total of 218.00 from holding New Perspective Fund or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
New Perspective Fund vs. Shinhan WTI Futures
Performance |
| Timeline |
| New Perspective |
| Shinhan WTI Futures |
New Perspective and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Shinhan WTI
The main advantage of trading using opposite New Perspective and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Shinhan WTI 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 WTI will offset losses from the drop in Shinhan WTI's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Shinhan WTI vs. DB Financial Investment | Shinhan WTI vs. Hyundai Industrial Co | Shinhan WTI vs. PJ Metal Co | Shinhan WTI vs. Formetal 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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