Correlation Between Sam Yang and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Shinhan Financial 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 Sam Yang and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam Yang Foods and Shinhan Financial Group, you can compare the effects of market volatilities on Sam Yang and Shinhan Financial 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 Sam Yang with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Shinhan Financial.
Diversification Opportunities for Sam Yang and Shinhan Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sam and Shinhan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Sam Yang 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 Sam Yang Foods are associated (or correlated) with Shinhan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Financial has no effect on the direction of Sam Yang i.e., Sam Yang and Shinhan Financial go up and down completely randomly.
Pair Corralation between Sam Yang and Shinhan Financial
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.31 times more return on investment than Shinhan Financial. However, Sam Yang is 1.31 times more volatile than Shinhan Financial Group. It trades about 0.4 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.14 per unit of risk. If you would invest 54,400,000 in Sam Yang Foods on September 19, 2024 and sell it today you would earn a total of 19,200,000 from holding Sam Yang Foods or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Shinhan Financial Group
Performance |
| Timeline |
| Sam Yang Foods |
| Shinhan Financial |
Sam Yang and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Shinhan Financial
The main advantage of trading using opposite Sam Yang and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Shinhan Financial 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 Shinhan Financial will offset losses from the drop in Shinhan Financial's long position.| Sam Yang vs. Dongil Metal Co | Sam Yang vs. PJ Metal Co | Sam Yang vs. Daehan Synthetic Fiber | Sam Yang vs. TK Chemical |
| Shinhan Financial vs. KB Financial Group | Shinhan Financial vs. Hana Financial | Shinhan Financial vs. Woori Financial Group | Shinhan Financial vs. Samsung Electronics Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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