Correlation Between Shinhan Financial and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Haitai Confectionery 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 Haitai Confectionery 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 Haitai Confectionery Foods, you can compare the effects of market volatilities on Shinhan Financial and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Haitai Confectionery.
Diversification Opportunities for Shinhan Financial and Haitai Confectionery
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Haitai is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Shinhan Financial and Haitai Confectionery
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 1.0 times more return on investment than Haitai Confectionery. However, Shinhan Financial is 1.0 times more volatile than Haitai Confectionery Foods. It trades about 0.28 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about -0.31 per unit of risk. If you would invest 4,895,000 in Shinhan Financial Group on November 6, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Shinhan Financial |
| Haitai Confectionery |
Shinhan Financial and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Haitai Confectionery
The main advantage of trading using opposite Shinhan Financial and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Shinhan Financial vs. Hironic Co | Shinhan Financial vs. LB Investment | Shinhan Financial vs. Stic Investments | Shinhan Financial vs. Nh Investment And |
| Haitai Confectionery vs. SEOWONINTECHCoLtd | Haitai Confectionery vs. KMH Hitech Co | Haitai Confectionery vs. Dongwoon Anatech Co | Haitai Confectionery vs. Mirai Semiconductors 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 Stocks Directory module to find actively traded stocks across global markets.
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