Correlation Between Shinhan Financial and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Shinhan Financial and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Hanwha InvestmentSecuri.
Diversification Opportunities for Shinhan Financial and Hanwha InvestmentSecuri
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Hanwha is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Shinhan Financial and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.49 times more return on investment than Hanwha InvestmentSecuri. However, Shinhan Financial Group is 2.05 times less risky than Hanwha InvestmentSecuri. It trades about 0.08 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.01 per unit of risk. If you would invest 5,130,000 in Shinhan Financial Group on September 1, 2024 and sell it today you would earn a total of 170,000 from holding Shinhan Financial Group or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinhan Financial Group vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Shinhan Financial |
| Hanwha InvestmentSecuri |
Shinhan Financial and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Hanwha InvestmentSecuri
The main advantage of trading using opposite Shinhan Financial and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Shinhan Financial vs. Nice Information Telecommunication | Shinhan Financial vs. Daishin Information Communications | Shinhan Financial vs. Samlip General Foods | Shinhan Financial vs. Hyundai Green Food |
| Hanwha InvestmentSecuri vs. Samsung Electronics Co | Hanwha InvestmentSecuri vs. Samsung Electronics Co | Hanwha InvestmentSecuri vs. KB Financial Group | Hanwha InvestmentSecuri vs. Shinhan 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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