Correlation Between Shinhan Financial and Ezwelfare
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Ezwelfare 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 Ezwelfare 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 Ezwelfare Co, you can compare the effects of market volatilities on Shinhan Financial and Ezwelfare 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 Ezwelfare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Ezwelfare.
Diversification Opportunities for Shinhan Financial and Ezwelfare
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Ezwelfare is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Ezwelfare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezwelfare 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 Ezwelfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezwelfare has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Ezwelfare go up and down completely randomly.
Pair Corralation between Shinhan Financial and Ezwelfare
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 1.24 times more return on investment than Ezwelfare. However, Shinhan Financial is 1.24 times more volatile than Ezwelfare Co. It trades about 0.05 of its potential returns per unit of risk. Ezwelfare Co is currently generating about -0.01 per unit of risk. If you would invest 3,456,118 in Shinhan Financial Group on December 12, 2024 and sell it today you would earn a total of 1,043,882 from holding Shinhan Financial Group or generate 30.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Shinhan Financial Group vs. Ezwelfare Co
Performance |
| Timeline |
| Shinhan Financial |
| Ezwelfare |
Shinhan Financial and Ezwelfare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Ezwelfare
The main advantage of trading using opposite Shinhan Financial and Ezwelfare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Ezwelfare 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 Ezwelfare will offset losses from the drop in Ezwelfare's long position.| Shinhan Financial vs. PJ Metal Co | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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