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
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Dongkuk is 0.31. 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 0.73 times more return on investment than Dongkuk Structures. However, Shinhan Financial Group is 1.38 times less risky than Dongkuk Structures. It trades about 0.08 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.15 per unit of risk. If you would invest 5,130,000 in Shinhan Financial Group on September 1, 2024 and sell it today you would earn a total of 170,000 from holding Shinhan Financial Group or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| 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. Nice Information Telecommunication | Shinhan Financial vs. Daishin Information Communications | Shinhan Financial vs. Samlip General Foods | Shinhan Financial vs. Hyundai Green Food |
| Dongkuk Structures vs. Korea New Network | Dongkuk Structures vs. ICD Co | Dongkuk Structures vs. DYPNF CoLtd | Dongkuk Structures vs. Busan Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |