Correlation Between Shinhan Financial and FOODWELL
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and FOODWELL 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 FOODWELL 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 FOODWELL Co, you can compare the effects of market volatilities on Shinhan Financial and FOODWELL 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 FOODWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and FOODWELL.
Diversification Opportunities for Shinhan Financial and FOODWELL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinhan and FOODWELL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and FOODWELL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOODWELL 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 FOODWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOODWELL has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and FOODWELL go up and down completely randomly.
Pair Corralation between Shinhan Financial and FOODWELL
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the FOODWELL. In addition to that, Shinhan Financial is 1.45 times more volatile than FOODWELL Co. It trades about -0.03 of its total potential returns per unit of risk. FOODWELL Co is currently generating about 0.0 per unit of volatility. If you would invest 502,000 in FOODWELL Co on September 3, 2024 and sell it today you would lose (3,000) from holding FOODWELL Co or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. FOODWELL Co
Performance |
| Timeline |
| Shinhan Financial |
| FOODWELL |
Shinhan Financial and FOODWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and FOODWELL
The main advantage of trading using opposite Shinhan Financial and FOODWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, FOODWELL 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 FOODWELL will offset losses from the drop in FOODWELL's long position.| Shinhan Financial vs. Dongil Technology | Shinhan Financial vs. Jeong Moon Information | Shinhan Financial vs. Koh Young Technology | Shinhan Financial vs. Eugene Technology CoLtd |
| FOODWELL vs. Nam Hwa Construction | FOODWELL vs. Daewoo Engineering Construction | FOODWELL vs. Sam Yang Foods | FOODWELL vs. Keyang Electric Machinery |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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