Correlation Between Dongbang Transport and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport 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 Dongbang Transport and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Shinhan Financial Group, you can compare the effects of market volatilities on Dongbang Transport 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 Dongbang Transport with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Shinhan Financial.
Diversification Opportunities for Dongbang Transport and Shinhan Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and Shinhan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Dongbang Transport 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 Dongbang Transport Logistics 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 Dongbang Transport i.e., Dongbang Transport and Shinhan Financial go up and down completely randomly.
Pair Corralation between Dongbang Transport and Shinhan Financial
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 2.76 times less return on investment than Shinhan Financial. In addition to that, Dongbang Transport is 1.64 times more volatile than Shinhan Financial Group. It trades about 0.07 of its total potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.31 per unit of volatility. If you would invest 4,765,000 in Shinhan Financial Group on October 29, 2024 and sell it today you would earn a total of 235,000 from holding Shinhan Financial Group or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Shinhan Financial Group
Performance |
| Timeline |
| Dongbang Transport |
| Shinhan Financial |
Dongbang Transport and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Shinhan Financial
The main advantage of trading using opposite Dongbang Transport and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport 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.| Dongbang Transport vs. Daewon Media Co | Dongbang Transport vs. KT Submarine Telecom | Dongbang Transport vs. Digital Power Communications | Dongbang Transport vs. Next Entertainment World |
| Shinhan Financial vs. Hanil Chemical Ind | Shinhan Financial vs. Hanwha Chemical Corp | Shinhan Financial vs. BIT Computer Co | Shinhan Financial vs. CG Hi Tech |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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