Correlation Between Shinhan Financial and Transcode Therapeutics

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

Diversification Opportunities for Shinhan Financial and Transcode Therapeutics

-0.34

Correlation Coefficient

Shinhan Financial  Transcode Therapeutics

Very good diversification

The 3 months correlation between Shinhan and Transcode is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Transcode Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcode Therapeutics 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 Transcode Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcode Therapeutics has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Transcode Therapeutics go up and down completely randomly.

Pair Corralation between Shinhan Financial and Transcode Therapeutics

Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.21 times more return on investment than Transcode Therapeutics. However, Shinhan Financial Group is 4.67 times less risky than Transcode Therapeutics. It trades about 0.32 of its potential returns per unit of risk. Transcode Therapeutics is currently generating about 0.06 per unit of risk. If you would invest  3,422  in Shinhan Financial Group on April 23, 2025 and sell it today you would earn a total of  1,550  from holding Shinhan Financial Group or generate 45.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shinhan Financial Group  vs.  Transcode Therapeutics

Shinhan Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Financial Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Shinhan Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Transcode Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transcode Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Transcode Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shinhan Financial and Transcode Therapeutics

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

The idea behind Shinhan Financial Group and Transcode Therapeutics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.