Correlation Between Shinhan Financial and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Hanmi Semiconductor 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 Hanmi Semiconductor 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 Hanmi Semiconductor Co, you can compare the effects of market volatilities on Shinhan Financial and Hanmi Semiconductor 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 Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Hanmi Semiconductor.
Diversification Opportunities for Shinhan Financial and Hanmi Semiconductor
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Hanmi is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor 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 Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between Shinhan Financial and Hanmi Semiconductor
Assuming the 90 days trading horizon Shinhan Financial is expected to generate 32.89 times less return on investment than Hanmi Semiconductor. But when comparing it to its historical volatility, Shinhan Financial Group is 5.32 times less risky than Hanmi Semiconductor. It trades about 0.07 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 8,470,000 in Hanmi Semiconductor Co on October 25, 2024 and sell it today you would earn a total of 4,140,000 from holding Hanmi Semiconductor Co or generate 48.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| Shinhan Financial |
| Hanmi Semiconductor |
Shinhan Financial and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Hanmi Semiconductor
The main advantage of trading using opposite Shinhan Financial and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.| Shinhan Financial vs. Woori Technology Investment | Shinhan Financial vs. UJU Electronics Co | Shinhan Financial vs. KTB Investment Securities | Shinhan Financial vs. DAEDUCK ELECTRONICS CoLtd |
| Hanmi Semiconductor vs. KB Financial Group | Hanmi Semiconductor vs. Shinhan Financial Group | Hanmi Semiconductor vs. Hana Financial | Hanmi Semiconductor vs. Woori 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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