Correlation Between Shinhan Financial and Pyung Hwa
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Pyung Hwa 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 Pyung Hwa 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 Pyung Hwa Industrial, you can compare the effects of market volatilities on Shinhan Financial and Pyung Hwa 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 Pyung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Pyung Hwa.
Diversification Opportunities for Shinhan Financial and Pyung Hwa
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinhan and Pyung is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Pyung Hwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyung Hwa Industrial 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 Pyung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyung Hwa Industrial has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Pyung Hwa go up and down completely randomly.
Pair Corralation between Shinhan Financial and Pyung Hwa
Assuming the 90 days trading horizon Shinhan Financial is expected to generate 15.12 times less return on investment than Pyung Hwa. But when comparing it to its historical volatility, Shinhan Financial Group is 7.42 times less risky than Pyung Hwa. It trades about 0.15 of its potential returns per unit of risk. Pyung Hwa Industrial is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 90,000 in Pyung Hwa Industrial on November 6, 2024 and sell it today you would earn a total of 37,700 from holding Pyung Hwa Industrial or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Pyung Hwa Industrial
Performance |
| Timeline |
| Shinhan Financial |
| Pyung Hwa Industrial |
Shinhan Financial and Pyung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Pyung Hwa
The main advantage of trading using opposite Shinhan Financial and Pyung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Pyung Hwa 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 Pyung Hwa will offset losses from the drop in Pyung Hwa's long position.| Shinhan Financial vs. Hironic Co | Shinhan Financial vs. LB Investment | Shinhan Financial vs. Stic Investments | Shinhan Financial vs. Nh Investment And |
| Pyung Hwa vs. Finebesteel | Pyung Hwa vs. Homecast CoLtd | Pyung Hwa vs. Jb Financial | Pyung Hwa vs. BooKook Steel Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |