Correlation Between Shinhan WTI and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech Co, you can compare the effects of market volatilities on Shinhan WTI and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and Wonbang Tech.
Diversification Opportunities for Shinhan WTI and Wonbang Tech
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and Wonbang is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of Shinhan WTI i.e., Shinhan WTI and Wonbang Tech go up and down completely randomly.
Pair Corralation between Shinhan WTI and Wonbang Tech
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 0.64 times more return on investment than Wonbang Tech. However, Shinhan WTI Futures is 1.57 times less risky than Wonbang Tech. It trades about 0.0 of its potential returns per unit of risk. Wonbang Tech Co is currently generating about -0.14 per unit of risk. If you would invest 729,500 in Shinhan WTI Futures on September 24, 2024 and sell it today you would lose (5,500) from holding Shinhan WTI Futures or give up 0.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.77% |
Values | Daily Returns |
Shinhan WTI Futures vs. Wonbang Tech Co
Performance |
Timeline |
Shinhan WTI Futures |
Wonbang Tech |
Shinhan WTI and Wonbang Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan WTI and Wonbang Tech
The main advantage of trading using opposite Shinhan WTI and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech's long position.Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. LG Energy Solution | Shinhan WTI vs. SK Hynix |
Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. LG Energy Solution | Wonbang Tech vs. SK Hynix |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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