Correlation Between Semyung Electric and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Semyung Electric 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 Semyung Electric and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semyung Electric Machinery and Shinhan Financial Group, you can compare the effects of market volatilities on Semyung Electric 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 Semyung Electric with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Shinhan Financial.
Diversification Opportunities for Semyung Electric and Shinhan Financial
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Semyung and Shinhan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Semyung Electric 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 Semyung Electric Machinery 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 Semyung Electric i.e., Semyung Electric and Shinhan Financial go up and down completely randomly.
Pair Corralation between Semyung Electric and Shinhan Financial
Assuming the 90 days trading horizon Semyung Electric is expected to generate 1.02 times less return on investment than Shinhan Financial. In addition to that, Semyung Electric is 2.38 times more volatile than Shinhan Financial Group. It trades about 0.03 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 4,447,208 in Shinhan Financial Group on September 2, 2024 and sell it today you would earn a total of 852,792 from holding Shinhan Financial Group or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. Shinhan Financial Group
Performance |
| Timeline |
| Semyung Electric Mac |
| Shinhan Financial |
Semyung Electric and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and Shinhan Financial
The main advantage of trading using opposite Semyung Electric and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric 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.| Semyung Electric vs. Dawonsys CoLtd | Semyung Electric vs. Robostar CoLtd | Semyung Electric vs. Daebo Magnetic CoLtd | Semyung Electric vs. Vitzro Tech Co |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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