Correlation Between Shinhan Financial and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial Co, you can compare the effects of market volatilities on Shinhan Financial and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Haesung Industrial.
Diversification Opportunities for Shinhan Financial and Haesung Industrial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Haesung is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Haesung Industrial go up and down completely randomly.
Pair Corralation between Shinhan Financial and Haesung Industrial
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Haesung Industrial. In addition to that, Shinhan Financial is 1.23 times more volatile than Haesung Industrial Co. It trades about -0.14 of its total potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.03 per unit of volatility. If you would invest 598,000 in Haesung Industrial Co on September 18, 2024 and sell it today you would lose (12,000) from holding Haesung Industrial Co or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Haesung Industrial Co
Performance |
| Timeline |
| Shinhan Financial |
| Haesung Industrial |
Shinhan Financial and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Haesung Industrial
The main advantage of trading using opposite Shinhan Financial and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Shinhan Financial vs. Hana Financial | Shinhan Financial vs. Haitai Confectionery Foods | Shinhan Financial vs. Sam Yang Foods | Shinhan Financial vs. KakaoBank Corp |
| Haesung Industrial vs. Solution Advanced Technology | Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Sam Chun Dang |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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