Correlation Between Wonbang Tech and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech 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 Wonbang Tech and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Shinhan Financial Group, you can compare the effects of market volatilities on Wonbang Tech 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 Wonbang Tech with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Shinhan Financial.
Diversification Opportunities for Wonbang Tech and Shinhan Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonbang and Shinhan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Wonbang Tech 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 Wonbang Tech Co 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 Wonbang Tech i.e., Wonbang Tech and Shinhan Financial go up and down completely randomly.
Pair Corralation between Wonbang Tech and Shinhan Financial
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.94 times more return on investment than Shinhan Financial. However, Wonbang Tech is 1.94 times more volatile than Shinhan Financial Group. It trades about 0.04 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.05 per unit of risk. If you would invest 826,416 in Wonbang Tech Co on September 24, 2024 and sell it today you would earn a total of 483,584 from holding Wonbang Tech Co or generate 58.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Wonbang Tech Co vs. Shinhan Financial Group
Performance |
| Timeline |
| Wonbang Tech |
| Shinhan Financial |
Wonbang Tech and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Shinhan Financial
The main advantage of trading using opposite Wonbang Tech and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech 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.| Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. LG Energy Solution | Wonbang Tech vs. SK Hynix |
| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Wonbang Tech Co | Shinhan Financial vs. Busan Industrial Co | Shinhan Financial vs. Busan Ind |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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