Correlation Between Ford and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Shinhan Inverse Silver, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Shinhan Inverse.
Diversification Opportunities for Ford and Shinhan Inverse
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Shinhan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver and Ford 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 Ford Motor 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 Silver has no effect on the direction of Ford i.e., Ford and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Ford and Shinhan Inverse
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Shinhan Inverse. In addition to that, Ford is 1.24 times more volatile than Shinhan Inverse Silver. It trades about -0.01 of its total potential returns per unit of risk. Shinhan Inverse Silver is currently generating about 0.01 per unit of volatility. If you would invest 353,500 in Shinhan Inverse Silver on August 29, 2024 and sell it today you would earn a total of 3,500 from holding Shinhan Inverse Silver or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.65% |
| Values | Daily Returns |
Ford Motor vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Ford Motor |
| Shinhan Inverse Silver |
Ford and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Shinhan Inverse
The main advantage of trading using opposite Ford and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and Shinhan Inverse Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shinhan Inverse vs. Samyung Trading Co | Shinhan Inverse vs. Genie Music | Shinhan Inverse vs. Sangsangin Investment Securities | Shinhan Inverse vs. SBI Investment KOREA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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