Correlation Between Shinhan Financial and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and SK Telecom 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 SK Telecom 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 SK Telecom Co, you can compare the effects of market volatilities on Shinhan Financial and SK Telecom 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 SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and SK Telecom.
Diversification Opportunities for Shinhan Financial and SK Telecom
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and 017670 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom 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 SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and SK Telecom go up and down completely randomly.
Pair Corralation between Shinhan Financial and SK Telecom
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the SK Telecom. In addition to that, Shinhan Financial is 1.72 times more volatile than SK Telecom Co. It trades about -0.21 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.0 per unit of volatility. If you would invest 5,680,000 in SK Telecom Co on September 24, 2024 and sell it today you would lose (10,000) from holding SK Telecom Co or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. SK Telecom Co
Performance |
| Timeline |
| Shinhan Financial |
| SK Telecom |
Shinhan Financial and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and SK Telecom
The main advantage of trading using opposite Shinhan Financial and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.| Shinhan Financial vs. KB Financial Group | Shinhan Financial vs. Hyundai Motor | Shinhan Financial vs. Hyundai Motor Co | Shinhan Financial vs. Hyundai Motor Co |
| SK Telecom vs. Samsung Electronics Co | SK Telecom vs. Samsung Electronics Co | SK Telecom vs. KB Financial Group | SK Telecom 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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