Correlation Between Korea Ratings and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Korea Ratings 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 Korea Ratings and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Ratings Co and Shinhan Inverse Silver, you can compare the effects of market volatilities on Korea Ratings 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 Korea Ratings with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Shinhan Inverse.
Diversification Opportunities for Korea Ratings and Shinhan Inverse
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Shinhan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co 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 Korea Ratings 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 Korea Ratings Co 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 Korea Ratings i.e., Korea Ratings and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Korea Ratings and Shinhan Inverse
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.37 times more return on investment than Shinhan Inverse. However, Korea Ratings Co is 2.7 times less risky than Shinhan Inverse. It trades about 0.11 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.01 per unit of risk. If you would invest 6,259,965 in Korea Ratings Co on October 11, 2024 and sell it today you would earn a total of 2,490,035 from holding Korea Ratings Co or generate 39.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Korea Ratings Co vs. Shinhan Inverse Silver
Performance |
Timeline |
Korea Ratings |
Shinhan Inverse Silver |
Korea Ratings and Shinhan Inverse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Ratings and Shinhan Inverse
The main advantage of trading using opposite Korea Ratings and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings 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.Korea Ratings vs. Osang Healthcare Co,Ltd | Korea Ratings vs. Chorokbaem Healthcare Co | Korea Ratings vs. Pyung Hwa Industrial | Korea Ratings vs. Hwasung Industrial Co |
Shinhan Inverse vs. Hanjin Transportation Co | Shinhan Inverse vs. ITM Semiconductor Co | Shinhan Inverse vs. Grand Korea Leisure | Shinhan Inverse vs. Cuckoo Electronics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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