Correlation Between Shinhan Financial and Seoul Broadcasting
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Seoul Broadcasting 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 Seoul Broadcasting 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 Seoul Broadcasting System, you can compare the effects of market volatilities on Shinhan Financial and Seoul Broadcasting 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 Seoul Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Seoul Broadcasting.
Diversification Opportunities for Shinhan Financial and Seoul Broadcasting
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Seoul is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Seoul Broadcasting System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Broadcasting System 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 Seoul Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Broadcasting System has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Seoul Broadcasting go up and down completely randomly.
Pair Corralation between Shinhan Financial and Seoul Broadcasting
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.61 times more return on investment than Seoul Broadcasting. However, Shinhan Financial Group is 1.64 times less risky than Seoul Broadcasting. It trades about 0.04 of its potential returns per unit of risk. Seoul Broadcasting System is currently generating about -0.02 per unit of risk. If you would invest 3,683,011 in Shinhan Financial Group on November 2, 2024 and sell it today you would earn a total of 1,316,989 from holding Shinhan Financial Group or generate 35.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Seoul Broadcasting System
Performance |
| Timeline |
| Shinhan Financial |
| Seoul Broadcasting System |
Shinhan Financial and Seoul Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Seoul Broadcasting
The main advantage of trading using opposite Shinhan Financial and Seoul Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Seoul Broadcasting 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 Seoul Broadcasting will offset losses from the drop in Seoul Broadcasting's long position.| Shinhan Financial vs. SCI Information Service | Shinhan Financial vs. Jeong Moon Information | Shinhan Financial vs. Sempio Foods Co | Shinhan Financial vs. System and Application |
| Seoul Broadcasting vs. Samyang Foods Co | Seoul Broadcasting vs. Nh Investment And | Seoul Broadcasting vs. E Investment Development | Seoul Broadcasting vs. Atinum Investment 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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