Correlation Between Kukdong Oil and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil 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 Kukdong Oil and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Shinhan Financial Group, you can compare the effects of market volatilities on Kukdong Oil 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 Kukdong Oil with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Shinhan Financial.
Diversification Opportunities for Kukdong Oil and Shinhan Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kukdong and Shinhan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Kukdong Oil 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 Kukdong Oil Chemicals 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 Kukdong Oil i.e., Kukdong Oil and Shinhan Financial go up and down completely randomly.
Pair Corralation between Kukdong Oil and Shinhan Financial
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Shinhan Financial. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 1.17 times less risky than Shinhan Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Shinhan Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,568,439 in Shinhan Financial Group on September 27, 2024 and sell it today you would earn a total of 321,561 from holding Shinhan Financial Group or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.38% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Shinhan Financial Group
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Shinhan Financial |
Kukdong Oil and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Shinhan Financial
The main advantage of trading using opposite Kukdong Oil and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil 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.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Wonbang Tech Co | Kukdong Oil vs. Busan Industrial Co | Kukdong Oil vs. Busan Ind |
| Shinhan Financial vs. Kukdong Oil Chemicals | Shinhan Financial vs. LG Chemicals | Shinhan Financial vs. ABOV Semiconductor Co | Shinhan Financial vs. SK Chemicals 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |