Correlation Between AeroSpace Technology and Shinhan Inverse

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

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

Diversification Opportunities for AeroSpace Technology and Shinhan Inverse

-0.68

Correlation Coefficient

AeroSpace Technology  Shinhan Inverse

Excellent diversification

The 3 months correlation between AeroSpace and Shinhan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of 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 AeroSpace Technology 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 AeroSpace Technology of 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 AeroSpace Technology i.e., AeroSpace Technology and Shinhan Inverse go up and down completely randomly.

Pair Corralation between AeroSpace Technology and Shinhan Inverse

Assuming the 90 days trading horizon AeroSpace Technology of is expected to generate 1.98 times more return on investment than Shinhan Inverse. However, AeroSpace Technology is 1.98 times more volatile than Shinhan Inverse Silver. It trades about 0.21 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.1 per unit of risk. If you would invest  51,000  in AeroSpace Technology of on December 26, 2024 and sell it today you would earn a total of  22,000  from holding AeroSpace Technology of or generate 43.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

AeroSpace Technology of  vs.  Shinhan Inverse Silver

AeroSpace Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AeroSpace Technology of are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AeroSpace Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shinhan Inverse Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shinhan Inverse Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AeroSpace Technology and Shinhan Inverse

The main advantage of trading using opposite AeroSpace Technology and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology 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 AeroSpace Technology of 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.