Correlation Between Eagon Industrial and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial 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 Eagon Industrial and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Shinhan Financial Group, you can compare the effects of market volatilities on Eagon Industrial 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 Eagon Industrial with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Shinhan Financial.
Diversification Opportunities for Eagon Industrial and Shinhan Financial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagon and Shinhan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Eagon Industrial 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 Eagon Industrial Co 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 Eagon Industrial i.e., Eagon Industrial and Shinhan Financial go up and down completely randomly.
Pair Corralation between Eagon Industrial and Shinhan Financial
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 0.47 times more return on investment than Shinhan Financial. However, Eagon Industrial Co is 2.13 times less risky than Shinhan Financial. It trades about -0.02 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.01 per unit of risk. If you would invest 502,000 in Eagon Industrial Co on September 4, 2024 and sell it today you would lose (5,000) from holding Eagon Industrial Co or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Shinhan Financial Group
Performance |
| Timeline |
| Eagon Industrial |
| Shinhan Financial |
Eagon Industrial and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Shinhan Financial
The main advantage of trading using opposite Eagon Industrial and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial 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.| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
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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