Correlation Between Shinhan Inverse and N Citron

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

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

Diversification Opportunities for Shinhan Inverse and N Citron

-0.03

Correlation Coefficient

Shinhan Inverse  N Citron

Good diversification

The 3 months correlation between Shinhan and 101400 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron and Shinhan Inverse 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 Shinhan Inverse Silver are associated (or correlated) with N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and N Citron go up and down completely randomly.

Pair Corralation between Shinhan Inverse and N Citron

Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to under-perform the N Citron. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Inverse Silver is 1.84 times less risky than N Citron. The stock trades about -0.1 of its potential returns per unit of risk. The N Citron is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  39,800  in N Citron on December 24, 2024 and sell it today you would lose (1,900) from holding N Citron or give up 4.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shinhan Inverse Silver  vs.  N Citron

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.

N Citron

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Shinhan Inverse and N Citron

The main advantage of trading using opposite Shinhan Inverse and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.

The idea behind Shinhan Inverse Silver and N Citron 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.