Correlation Between Celltrion Pharm and Shinhan Inverse

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

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

Diversification Opportunities for Celltrion Pharm and Shinhan Inverse

-0.22

Correlation Coefficient

Celltrion Pharm  Shinhan Inverse

Very good diversification

The 3 months correlation between Celltrion and Shinhan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Celltrion Pharm and Shinhan Inverse WTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse WTI and Celltrion Pharm 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 Celltrion Pharm 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 WTI has no effect on the direction of Celltrion Pharm i.e., Celltrion Pharm and Shinhan Inverse go up and down completely randomly.

Pair Corralation between Celltrion Pharm and Shinhan Inverse

Assuming the 90 days trading horizon Celltrion Pharm is expected to under-perform the Shinhan Inverse. In addition to that, Celltrion Pharm is 1.92 times more volatile than Shinhan Inverse WTI. It trades about -0.08 of its total potential returns per unit of risk. Shinhan Inverse WTI is currently generating about -0.01 per unit of volatility. If you would invest  266,500  in Shinhan Inverse WTI on October 6, 2024 and sell it today you would lose (4,500) from holding Shinhan Inverse WTI or give up 1.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Celltrion Pharm  vs.  Shinhan Inverse WTI

Celltrion Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celltrion Pharm 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 WTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shinhan Inverse WTI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shinhan Inverse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celltrion Pharm and Shinhan Inverse

The main advantage of trading using opposite Celltrion Pharm and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celltrion Pharm 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 Celltrion Pharm and Shinhan Inverse WTI 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..