Correlation Between Shinhan Inverse and Samyoung M

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

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

Diversification Opportunities for Shinhan Inverse and Samyoung M

-0.03

Correlation Coefficient

Shinhan Inverse  Samyoung M

Good diversification

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

Pair Corralation between Shinhan Inverse and Samyoung M

Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to under-perform the Samyoung M. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Inverse WTI is 1.33 times less risky than Samyoung M. The stock trades about -0.04 of its potential returns per unit of risk. The Samyoung M Tek Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  414,500  in Samyoung M Tek Co on September 12, 2024 and sell it today you would lose (6,500) from holding Samyoung M Tek Co or give up 1.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Shinhan Inverse WTI  vs.  Samyoung M Tek Co

Shinhan Inverse WTI

Risk-Adjusted Performance

0 of 100

Very Weak

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

Samyoung M Tek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samyoung M Tek Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samyoung M 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 Samyoung M

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

The idea behind Shinhan Inverse WTI and Samyoung M Tek 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.