Correlation Between Pungguk Ethanol and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Pungguk Ethanol 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 Pungguk Ethanol and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pungguk Ethanol Industrial and Shinhan Financial Group, you can compare the effects of market volatilities on Pungguk Ethanol 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 Pungguk Ethanol with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pungguk Ethanol and Shinhan Financial.
Diversification Opportunities for Pungguk Ethanol and Shinhan Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pungguk and Shinhan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pungguk Ethanol Industrial and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Pungguk Ethanol 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 Pungguk Ethanol Industrial 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 Pungguk Ethanol i.e., Pungguk Ethanol and Shinhan Financial go up and down completely randomly.
Pair Corralation between Pungguk Ethanol and Shinhan Financial
Assuming the 90 days trading horizon Pungguk Ethanol Industrial is expected to under-perform the Shinhan Financial. In addition to that, Pungguk Ethanol is 1.05 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 0.06 per unit of volatility. If you would invest 3,402,325 in Shinhan Financial Group on September 4, 2024 and sell it today you would earn a total of 1,987,675 from holding Shinhan Financial Group or generate 58.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pungguk Ethanol Industrial vs. Shinhan Financial Group
Performance |
| Timeline |
| Pungguk Ethanol Indu |
| Shinhan Financial |
Pungguk Ethanol and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pungguk Ethanol and Shinhan Financial
The main advantage of trading using opposite Pungguk Ethanol and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pungguk Ethanol 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.| Pungguk Ethanol vs. Tae Kyung Chemical | Pungguk Ethanol vs. Kukdong Oil Chemicals | Pungguk Ethanol vs. Miwon Chemical | Pungguk Ethanol vs. Daehan Synthetic Fiber |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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