Correlation Between Shinhan Financial and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Barunson Entertainment 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 Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Shinhan Financial and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Barunson Entertainment.
Diversification Opportunities for Shinhan Financial and Barunson Entertainment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Barunson is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Shinhan Financial and Barunson Entertainment
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.81 times more return on investment than Barunson Entertainment. However, Shinhan Financial Group is 1.24 times less risky than Barunson Entertainment. It trades about 0.05 of its potential returns per unit of risk. Barunson Entertainment Arts is currently generating about -0.05 per unit of risk. If you would invest 3,159,445 in Shinhan Financial Group on September 24, 2024 and sell it today you would earn a total of 1,665,555 from holding Shinhan Financial Group or generate 52.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Barunson Entertainment Arts
Performance |
| Timeline |
| Shinhan Financial |
| Barunson Entertainment |
Shinhan Financial and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Barunson Entertainment
The main advantage of trading using opposite Shinhan Financial and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment'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 |
| Barunson Entertainment vs. Samsung Electronics Co | Barunson Entertainment vs. Samsung Electronics Co | Barunson Entertainment vs. KB Financial Group | Barunson Entertainment 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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