Correlation Between Shinhan Financial and MEDIANA CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and MEDIANA CoLtd 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 MEDIANA CoLtd 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 MEDIANA CoLtd, you can compare the effects of market volatilities on Shinhan Financial and MEDIANA CoLtd 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 MEDIANA CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and MEDIANA CoLtd.
Diversification Opportunities for Shinhan Financial and MEDIANA CoLtd
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and MEDIANA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and MEDIANA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIANA CoLtd 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 MEDIANA CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIANA CoLtd has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and MEDIANA CoLtd go up and down completely randomly.
Pair Corralation between Shinhan Financial and MEDIANA CoLtd
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the MEDIANA CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 1.53 times less risky than MEDIANA CoLtd. The stock trades about -0.04 of its potential returns per unit of risk. The MEDIANA CoLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 457,500 in MEDIANA CoLtd on August 29, 2024 and sell it today you would earn a total of 22,500 from holding MEDIANA CoLtd or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. MEDIANA CoLtd
Performance |
| Timeline |
| Shinhan Financial |
| MEDIANA CoLtd |
Shinhan Financial and MEDIANA CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and MEDIANA CoLtd
The main advantage of trading using opposite Shinhan Financial and MEDIANA CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, MEDIANA CoLtd 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 MEDIANA CoLtd will offset losses from the drop in MEDIANA CoLtd's long position.| Shinhan Financial vs. Sunny Electronics Corp | Shinhan Financial vs. Miwon Chemicals Co | Shinhan Financial vs. Samyoung Electronics Co | Shinhan Financial vs. Digital Multimedia Technology |
| MEDIANA CoLtd vs. Medy Tox | MEDIANA CoLtd vs. Busan Industrial Co | MEDIANA CoLtd vs. Busan Ind | MEDIANA CoLtd vs. Mirae Asset Daewoo |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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