Correlation Between Shinhan Financial and Clean Science
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Clean Science 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 Clean Science 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 Clean Science co, you can compare the effects of market volatilities on Shinhan Financial and Clean Science 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 Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Clean Science.
Diversification Opportunities for Shinhan Financial and Clean Science
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Clean is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co 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 Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Clean Science go up and down completely randomly.
Pair Corralation between Shinhan Financial and Clean Science
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Clean Science. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 1.43 times less risky than Clean Science. The stock trades about -0.13 of its potential returns per unit of risk. The Clean Science co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 465,500 in Clean Science co on November 27, 2024 and sell it today you would earn a total of 37,500 from holding Clean Science co or generate 8.06% 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. Clean Science co
Performance |
| Timeline |
| Shinhan Financial |
| Clean Science co |
Shinhan Financial and Clean Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Clean Science
The main advantage of trading using opposite Shinhan Financial and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.| Shinhan Financial vs. Mgame Corp | Shinhan Financial vs. Vissem Electronics Co | Shinhan Financial vs. DAEDUCK ELECTRONICS CoLtd | Shinhan Financial vs. GAMEVIL |
| Clean Science vs. Aprogen Healthcare Games | Clean Science vs. Hanwha InvestmentSecurities Co | Clean Science vs. KTB Investment Securities | Clean Science vs. E Investment Development |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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