Correlation Between Mobile Appliance and Shinhan Inverse

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

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

Diversification Opportunities for Mobile Appliance and Shinhan Inverse

-0.01

Correlation Coefficient

Mobile Appliance  Shinhan Inverse

Good diversification

The 3 months correlation between Mobile and Shinhan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance i.e., Mobile Appliance and Shinhan Inverse go up and down completely randomly.

Pair Corralation between Mobile Appliance and Shinhan Inverse

Assuming the 90 days trading horizon Mobile Appliance is expected to generate 1.87 times more return on investment than Shinhan Inverse. However, Mobile Appliance is 1.87 times more volatile than Shinhan Inverse Silver. It trades about 0.0 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.02 per unit of risk. If you would invest  312,000  in Mobile Appliance on October 24, 2024 and sell it today you would lose (81,500) from holding Mobile Appliance or give up 26.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.34%
Values	Daily Returns

Mobile Appliance  vs.  Shinhan Inverse Silver

Mobile Appliance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Appliance are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobile Appliance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Shinhan Inverse Silver

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Inverse Silver are ranked lower than 7 (%) 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 Mobile Appliance and Shinhan Inverse

The main advantage of trading using opposite Mobile Appliance and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance 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 Mobile Appliance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..