Correlation Between Shinhan Financial and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Samhwa Paint 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 Shinhan Financial and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Financial Group and Samhwa Paint Industrial, you can compare the effects of market volatilities on Shinhan Financial and Samhwa Paint 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 Shinhan Financial with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Samhwa Paint.
Diversification Opportunities for Shinhan Financial and Samhwa Paint
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Samhwa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Shinhan Financial 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 Shinhan Financial Group are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Samhwa Paint go up and down completely randomly.
Pair Corralation between Shinhan Financial and Samhwa Paint
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.94 times more return on investment than Samhwa Paint. However, Shinhan Financial Group is 1.07 times less risky than Samhwa Paint. It trades about -0.07 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.14 per unit of risk. If you would invest 5,600,000 in Shinhan Financial Group on November 6, 2024 and sell it today you would lose (490,000) from holding Shinhan Financial Group or give up 8.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Shinhan Financial Group vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Shinhan Financial |
| Samhwa Paint Industrial |
Shinhan Financial and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Samhwa Paint
The main advantage of trading using opposite Shinhan Financial and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Shinhan Financial vs. Hironic Co | Shinhan Financial vs. LB Investment | Shinhan Financial vs. Stic Investments | Shinhan Financial vs. Nh Investment And |
| Samhwa Paint vs. Hankukpackage Co | Samhwa Paint vs. Lotte Non Life Insurance | Samhwa Paint vs. Shinhan Inverse Silver | Samhwa Paint vs. Korean Reinsurance Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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