Correlation Between Shinhan Inverse and Hyundai Green

Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Hyundai Green 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 Hyundai Green 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 Hyundai Green Food, you can compare the effects of market volatilities on Shinhan Inverse and Hyundai Green 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 Hyundai Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Hyundai Green.

Diversification Opportunities for Shinhan Inverse and Hyundai Green

0.37

Correlation Coefficient

Shinhan Inverse  Hyundai Green

Weak diversification

The 3 months correlation between Shinhan and Hyundai is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Copper and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food 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 Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Hyundai Green go up and down completely randomly.

Pair Corralation between Shinhan Inverse and Hyundai Green

Assuming the 90 days trading horizon Shinhan Inverse Copper is expected to under-perform the Hyundai Green. In addition to that, Shinhan Inverse is 1.1 times more volatile than Hyundai Green Food. It trades about -0.18 of its total potential returns per unit of risk. Hyundai Green Food is currently generating about 0.01 per unit of volatility. If you would invest  1,444,000  in Hyundai Green Food on December 30, 2024 and sell it today you would lose (1,000.00) from holding Hyundai Green Food or give up 0.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Shinhan Inverse Copper  vs.  Hyundai Green Food

Shinhan Inverse Copper

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shinhan Inverse Copper 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyundai Green Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyundai Green Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hyundai Green 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 Hyundai Green

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

The idea behind Shinhan Inverse Copper and Hyundai Green Food 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.