Correlation Between Daiyang Metal and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal 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 Daiyang Metal and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and Shinhan Financial Group, you can compare the effects of market volatilities on Daiyang Metal 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 Daiyang Metal with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Shinhan Financial.
Diversification Opportunities for Daiyang Metal and Shinhan Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daiyang and Shinhan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal 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 Daiyang Metal 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 Daiyang Metal 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 Daiyang Metal i.e., Daiyang Metal and Shinhan Financial go up and down completely randomly.
Pair Corralation between Daiyang Metal and Shinhan Financial
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the Shinhan Financial. In addition to that, Daiyang Metal is 2.8 times more volatile than Shinhan Financial Group. It trades about -0.11 of its total potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.07 per unit of volatility. If you would invest 4,940,000 in Shinhan Financial Group on October 25, 2024 and sell it today you would earn a total of 60,000 from holding Shinhan Financial Group or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. Shinhan Financial Group
Performance |
| Timeline |
| Daiyang Metal |
| Shinhan Financial |
Daiyang Metal and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Shinhan Financial
The main advantage of trading using opposite Daiyang Metal and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal 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.| Daiyang Metal vs. Handok Clean Tech | Daiyang Metal vs. Dong A Steel Technology | Daiyang Metal vs. Daechang Steel Co | Daiyang Metal vs. DataSolution |
| Shinhan Financial vs. Woori Technology Investment | Shinhan Financial vs. UJU Electronics Co | Shinhan Financial vs. KTB Investment Securities | Shinhan Financial vs. DAEDUCK ELECTRONICS CoLtd |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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