Correlation Between Shinhan Financial and Display Tech
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Display Tech 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 Display Tech 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 Display Tech Co, you can compare the effects of market volatilities on Shinhan Financial and Display Tech 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 Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Display Tech.
Diversification Opportunities for Shinhan Financial and Display Tech
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Display is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech 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 Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Display Tech go up and down completely randomly.
Pair Corralation between Shinhan Financial and Display Tech
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.59 times more return on investment than Display Tech. However, Shinhan Financial Group is 1.69 times less risky than Display Tech. It trades about 0.31 of its potential returns per unit of risk. Display Tech Co is currently generating about 0.17 per unit of risk. If you would invest 4,765,000 in Shinhan Financial Group on October 29, 2024 and sell it today you would earn a total of 235,000 from holding Shinhan Financial Group or generate 4.93% 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. Display Tech Co
Performance |
| Timeline |
| Shinhan Financial |
| Display Tech |
Shinhan Financial and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Display Tech
The main advantage of trading using opposite Shinhan Financial and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's long position.| Shinhan Financial vs. Dong A Steel Technology | Shinhan Financial vs. Moonbae Steel | Shinhan Financial vs. Bookook Steel | Shinhan Financial vs. SeAH Besteel Corp |
| Display Tech vs. Nable Communications | Display Tech vs. Hyundai Home Shopping | Display Tech vs. Automobile Pc | Display Tech vs. Korea Alcohol Industrial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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