Correlation Between Shinhan Inverse and SIMMTECH

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

By analyzing existing cross correlation between Shinhan Inverse Copper and SIMMTECH Co, you can compare the effects of market volatilities on Shinhan Inverse and SIMMTECH 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 SIMMTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and SIMMTECH.

Diversification Opportunities for Shinhan Inverse and SIMMTECH

-0.87

Correlation Coefficient

Shinhan Inverse  SIMMTECH

Pay attention - limited upside

The 3 months correlation between Shinhan and SIMMTECH is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and SIMMTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMMTECH 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 Copper are associated (or correlated) with SIMMTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMMTECH has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and SIMMTECH go up and down completely randomly.

Pair Corralation between Shinhan Inverse and SIMMTECH

Assuming the 90 days trading horizon Shinhan Inverse is expected to generate 2.06 times less return on investment than SIMMTECH. But when comparing it to its historical volatility, Shinhan Inverse Copper is 2.9 times less risky than SIMMTECH. It trades about 0.37 of its potential returns per unit of risk. SIMMTECH Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  995,000  in SIMMTECH Co on October 8, 2024 and sell it today you would earn a total of  125,000  from holding SIMMTECH Co or generate 12.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Shinhan Inverse Copper  vs.  SIMMTECH Co

Shinhan Inverse Copper

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Inverse Copper are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinhan Inverse sustained solid returns over the last few months and may actually be approaching a breakup point.

SIMMTECH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIMMTECH Co 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.

Pair Trading with Shinhan Inverse and SIMMTECH

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

The idea behind Shinhan Inverse Copper and SIMMTECH Co 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.