Correlation Between Shinhan Financial and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Shinhan Financial and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Incar Financial.
Diversification Opportunities for Shinhan Financial and Incar Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Incar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Incar Financial go up and down completely randomly.
Pair Corralation between Shinhan Financial and Incar Financial
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.55 times more return on investment than Incar Financial. However, Shinhan Financial Group is 1.8 times less risky than Incar Financial. It trades about 0.03 of its potential returns per unit of risk. Incar Financial Service is currently generating about -0.26 per unit of risk. If you would invest 4,950,000 in Shinhan Financial Group on October 14, 2024 and sell it today you would earn a total of 35,000 from holding Shinhan Financial Group or generate 0.71% 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. Incar Financial Service
Performance |
| Timeline |
| Shinhan Financial |
| Incar Financial Service |
Shinhan Financial and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Incar Financial
The main advantage of trading using opposite Shinhan Financial and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Shinhan Financial vs. Incar Financial Service | Shinhan Financial vs. TS Investment Corp | Shinhan Financial vs. Hana Financial | Shinhan Financial vs. ABOV Semiconductor Co |
| Incar Financial vs. KB Financial Group | Incar Financial vs. Shinhan Financial Group | Incar Financial vs. Techwing | Incar Financial vs. Samsung Life Insurance |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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