Correlation Between Shinhan Financial and Mobileleader CoLtd
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Mobileleader CoLtd 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 Mobileleader CoLtd 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 Mobileleader CoLtd, you can compare the effects of market volatilities on Shinhan Financial and Mobileleader CoLtd 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 Mobileleader CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Mobileleader CoLtd.
Diversification Opportunities for Shinhan Financial and Mobileleader CoLtd
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinhan and Mobileleader is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Mobileleader CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileleader CoLtd 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 Mobileleader CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileleader CoLtd has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Mobileleader CoLtd go up and down completely randomly.
Pair Corralation between Shinhan Financial and Mobileleader CoLtd
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 1.12 times more return on investment than Mobileleader CoLtd. However, Shinhan Financial is 1.12 times more volatile than Mobileleader CoLtd. It trades about 0.05 of its potential returns per unit of risk. Mobileleader CoLtd 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Mobileleader CoLtd
Performance |
| Timeline |
| Shinhan Financial |
| Mobileleader CoLtd |
Shinhan Financial and Mobileleader CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Mobileleader CoLtd
The main advantage of trading using opposite Shinhan Financial and Mobileleader CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Mobileleader CoLtd 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 Mobileleader CoLtd will offset losses from the drop in Mobileleader CoLtd'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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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