Correlation Between Samlip General and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Samlip General 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 Samlip General and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samlip General Foods and Shinhan Financial Group, you can compare the effects of market volatilities on Samlip General 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 Samlip General with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samlip General and Shinhan Financial.
Diversification Opportunities for Samlip General and Shinhan Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samlip and Shinhan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Samlip General 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 Samlip General 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 Samlip General 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 Samlip General i.e., Samlip General and Shinhan Financial go up and down completely randomly.
Pair Corralation between Samlip General and Shinhan Financial
Assuming the 90 days trading horizon Samlip General Foods is expected to under-perform the Shinhan Financial. But the stock apears to be less risky and, when comparing its historical volatility, Samlip General Foods is 1.12 times less risky than Shinhan Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Shinhan Financial Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 5,450,000 in Shinhan Financial Group on September 3, 2024 and sell it today you would lose (150,000) from holding Shinhan Financial Group or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samlip General Foods vs. Shinhan Financial Group
Performance |
| Timeline |
| Samlip General Foods |
| Shinhan Financial |
Samlip General and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samlip General and Shinhan Financial
The main advantage of trading using opposite Samlip General and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samlip General 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.| Samlip General vs. Pan Entertainment Co | Samlip General vs. Barunson Entertainment Arts | Samlip General vs. Finebesteel | Samlip General vs. Kaonmedia Co |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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