Correlation Between Shinhan Financial and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on Shinhan Financial and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Dongkuk Structures.
Diversification Opportunities for Shinhan Financial and Dongkuk Structures
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Dongkuk is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Shinhan Financial and Dongkuk Structures
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.66 times more return on investment than Dongkuk Structures. However, Shinhan Financial Group is 1.52 times less risky than Dongkuk Structures. It trades about 0.28 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.34 per unit of risk. If you would invest 4,895,000 in Shinhan Financial Group on November 5, 2024 and sell it today you would earn a total of 215,000 from holding Shinhan Financial Group or generate 4.39% 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. Dongkuk Structures Constructio
Performance |
| Timeline |
| Shinhan Financial |
| Dongkuk Structures |
Shinhan Financial and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Dongkuk Structures
The main advantage of trading using opposite Shinhan Financial and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Shinhan Financial vs. ABCO Electronics Co | Shinhan Financial vs. Jahwa Electronics Co | Shinhan Financial vs. Cuckoo Electronics Co | Shinhan Financial vs. Kukdong Oil Chemicals |
| Dongkuk Structures vs. Samsung Life Insurance | Dongkuk Structures vs. Jin Air Co | Dongkuk Structures vs. KakaoBank Corp | Dongkuk Structures vs. GS Retail 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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