Correlation Between Nuintek CoLtd and Shinhan Inverse

Can any of the company-specific risk be diversified away by investing in both Nuintek CoLtd 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 Nuintek CoLtd and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuintek CoLtd and Shinhan Inverse Silver, you can compare the effects of market volatilities on Nuintek CoLtd 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 Nuintek CoLtd with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuintek CoLtd and Shinhan Inverse.

Diversification Opportunities for Nuintek CoLtd and Shinhan Inverse

-0.42

Correlation Coefficient

Nuintek CoLtd  Shinhan Inverse

Very good diversification

The 3 months correlation between Nuintek and Shinhan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nuintek CoLtd 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 Nuintek CoLtd 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 Nuintek CoLtd 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 Nuintek CoLtd i.e., Nuintek CoLtd and Shinhan Inverse go up and down completely randomly.

Pair Corralation between Nuintek CoLtd and Shinhan Inverse

Assuming the 90 days trading horizon Nuintek CoLtd is expected to under-perform the Shinhan Inverse. In addition to that, Nuintek CoLtd is 1.23 times more volatile than Shinhan Inverse Silver. It trades about -0.15 of its total potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.02 per unit of volatility. If you would invest  460,500  in Shinhan Inverse Silver on October 4, 2024 and sell it today you would lose (91,500) from holding Shinhan Inverse Silver or give up 19.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.06%
Values	Daily Returns

Nuintek CoLtd  vs.  Shinhan Inverse Silver

Nuintek CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuintek CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shinhan Inverse Silver

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Inverse Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinhan Inverse may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nuintek CoLtd and Shinhan Inverse

The main advantage of trading using opposite Nuintek CoLtd and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuintek CoLtd 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 Nuintek CoLtd 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.