Correlation Between Tuksu Engineering and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Tuksu Engineering 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 Tuksu Engineering and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and Shinhan Financial Group, you can compare the effects of market volatilities on Tuksu Engineering 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 Tuksu Engineering with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and Shinhan Financial.
Diversification Opportunities for Tuksu Engineering and Shinhan Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tuksu and Shinhan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd 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 Tuksu Engineering i.e., Tuksu Engineering and Shinhan Financial go up and down completely randomly.
Pair Corralation between Tuksu Engineering and Shinhan Financial
Assuming the 90 days trading horizon Tuksu Engineering ConstructionLtd is expected to generate 1.41 times more return on investment than Shinhan Financial. However, Tuksu Engineering is 1.41 times more volatile than Shinhan Financial Group. It trades about 0.07 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.12 per unit of risk. If you would invest 631,000 in Tuksu Engineering ConstructionLtd on October 26, 2024 and sell it today you would earn a total of 42,000 from holding Tuksu Engineering ConstructionLtd or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuksu Engineering Construction vs. Shinhan Financial Group
Performance |
| Timeline |
| Tuksu Engineering |
| Shinhan Financial |
Tuksu Engineering and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuksu Engineering and Shinhan Financial
The main advantage of trading using opposite Tuksu Engineering and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuksu Engineering 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.| Tuksu Engineering vs. Shinhan Financial Group | Tuksu Engineering vs. Nh Investment And | Tuksu Engineering vs. Dongbu Insurance Co | Tuksu Engineering vs. Korean Reinsurance Co |
| Shinhan Financial vs. KB Financial Group | Shinhan Financial vs. Shinhan Financial Group | Shinhan Financial vs. Hana Financial | Shinhan Financial vs. Woori Financial Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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