Correlation Between Shinhan WTI and Nature

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Nature 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 WTI and Nature into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan WTI Futures and Nature and Environment, you can compare the effects of market volatilities on Shinhan WTI and Nature 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 WTI with a short position of Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Nature.

Diversification Opportunities for Shinhan WTI and Nature

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Shinhan and Nature is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment and Shinhan WTI 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 WTI Futures are associated (or correlated) with Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Nature go up and down completely randomly.

Pair Corralation between Shinhan WTI and Nature

Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.44 times more return on investment than Nature. However, Shinhan WTI Futures is 2.26 times less risky than Nature. It trades about 0.04 of its potential returns per unit of risk. Nature and Environment is currently generating about 0.0 per unit of risk. If you would invest  716,000  in Shinhan WTI Futures on October 1, 2024 and sell it today you would earn a total of  16,000  from holding Shinhan WTI Futures or generate 2.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Shinhan WTI Futures  vs.  Nature and Environment

 Performance 
       Timeline  
Shinhan WTI Futures 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan WTI Futures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shinhan WTI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Nature and Environment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nature and Environment 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.

Shinhan WTI and Nature Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shinhan WTI and Nature

The main advantage of trading using opposite Shinhan WTI and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.
The idea behind Shinhan WTI Futures and Nature and Environment 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Technical Analysis
Check basic technical indicators and analysis based on most latest market data