Correlation Between Shinhan Financial and Jeongsan Aikang
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Jeongsan Aikang 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 Financial and Jeongsan Aikang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Financial Group and Jeongsan Aikang CoLtd, you can compare the effects of market volatilities on Shinhan Financial and Jeongsan Aikang 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 Financial with a short position of Jeongsan Aikang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Jeongsan Aikang.
Diversification Opportunities for Shinhan Financial and Jeongsan Aikang
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Jeongsan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Jeongsan Aikang CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeongsan Aikang CoLtd and Shinhan Financial 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 Financial Group are associated (or correlated) with Jeongsan Aikang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeongsan Aikang CoLtd has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Jeongsan Aikang go up and down completely randomly.
Pair Corralation between Shinhan Financial and Jeongsan Aikang
If you would invest 4,455,000 in Shinhan Financial Group on February 4, 2024 and sell it today you would earn a total of 190,000 from holding Shinhan Financial Group or generate 4.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
Shinhan Financial Group vs. Jeongsan Aikang CoLtd
Performance |
Timeline |
Shinhan Financial |
Jeongsan Aikang CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Shinhan Financial and Jeongsan Aikang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and Jeongsan Aikang
The main advantage of trading using opposite Shinhan Financial and Jeongsan Aikang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Jeongsan Aikang 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 Jeongsan Aikang will offset losses from the drop in Jeongsan Aikang's long position.Shinhan Financial vs. SK Chemicals Co | Shinhan Financial vs. Sung Bo Chemicals | Shinhan Financial vs. Miwon Chemicals Co | Shinhan Financial vs. Daejung Chemicals Metals |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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