Correlation Between Shinsegae Engineering and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Shinsegae 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 Shinsegae 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 Shinsegae Engineering Construction and Shinhan Financial Group, you can compare the effects of market volatilities on Shinsegae 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 Shinsegae Engineering with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and Shinhan Financial.
Diversification Opportunities for Shinsegae Engineering and Shinhan Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinsegae and Shinhan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Shinsegae 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 Shinsegae Engineering Construction 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 Shinsegae Engineering i.e., Shinsegae Engineering and Shinhan Financial go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and Shinhan Financial
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to under-perform the Shinhan Financial. In addition to that, Shinsegae Engineering is 1.31 times more volatile than Shinhan Financial Group. It trades about -0.01 of its total potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.05 per unit of volatility. If you would invest 3,551,082 in Shinhan Financial Group on November 9, 2024 and sell it today you would earn a total of 1,448,918 from holding Shinhan Financial Group or generate 40.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.16% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. Shinhan Financial Group
Performance |
| Timeline |
| Shinsegae Engineering |
Risk-Adjusted Performance
Modest
Weak | Strong |
| Shinhan Financial |
Shinsegae Engineering and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and Shinhan Financial
The main advantage of trading using opposite Shinsegae Engineering and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae 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.| Shinsegae Engineering vs. Seers Technology | Shinsegae Engineering vs. CKH Food Health | Shinsegae Engineering vs. Adaptive Plasma Technology | Shinsegae Engineering vs. Samlip General Foods |
| Shinhan Financial vs. Duksan Hi Metal | Shinhan Financial vs. Green Cross Medical | Shinhan Financial vs. Woorim Machinery Co | Shinhan Financial vs. Taegu Broadcasting |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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