Correlation Between Shinhan Financial and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Nasmedia 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 Nasmedia 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 Nasmedia Co, you can compare the effects of market volatilities on Shinhan Financial and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Nasmedia.
Diversification Opportunities for Shinhan Financial and Nasmedia
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Nasmedia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Nasmedia go up and down completely randomly.
Pair Corralation between Shinhan Financial and Nasmedia
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 1.02 times more return on investment than Nasmedia. However, Shinhan Financial is 1.02 times more volatile than Nasmedia Co. It trades about 0.39 of its potential returns per unit of risk. Nasmedia Co is currently generating about 0.04 per unit of risk. If you would invest 4,775,000 in Shinhan Financial Group on November 3, 2024 and sell it today you would earn a total of 335,000 from holding Shinhan Financial Group or generate 7.02% 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. Nasmedia Co
Performance |
| Timeline |
| Shinhan Financial |
| Nasmedia |
Shinhan Financial and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Nasmedia
The main advantage of trading using opposite Shinhan Financial and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Shinhan Financial vs. UJU Electronics Co | Shinhan Financial vs. DAEDUCK ELECTRONICS CoLtd | Shinhan Financial vs. Daesung Industrial Co | Shinhan Financial vs. ABCO Electronics Co |
| Nasmedia vs. Asiana Airlines | Nasmedia vs. Hanjoo Light Metal | Nasmedia vs. Korean Reinsurance Co | Nasmedia vs. Youngsin Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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