Correlation Between Shinhan Financial and Rainbow Robotics
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Rainbow Robotics 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 Rainbow Robotics 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 Rainbow Robotics, you can compare the effects of market volatilities on Shinhan Financial and Rainbow Robotics 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 Rainbow Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Rainbow Robotics.
Diversification Opportunities for Shinhan Financial and Rainbow Robotics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Rainbow is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Rainbow Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainbow Robotics 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 Rainbow Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainbow Robotics has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Rainbow Robotics go up and down completely randomly.
Pair Corralation between Shinhan Financial and Rainbow Robotics
Assuming the 90 days trading horizon Shinhan Financial is expected to generate 48.62 times less return on investment than Rainbow Robotics. But when comparing it to its historical volatility, Shinhan Financial Group is 8.13 times less risky than Rainbow Robotics. It trades about 0.08 of its potential returns per unit of risk. Rainbow Robotics is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 13,480,000 in Rainbow Robotics on October 23, 2024 and sell it today you would earn a total of 12,420,000 from holding Rainbow Robotics or generate 92.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shinhan Financial Group vs. Rainbow Robotics
Performance |
| Timeline |
| Shinhan Financial |
| Rainbow Robotics |
Shinhan Financial and Rainbow Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Rainbow Robotics
The main advantage of trading using opposite Shinhan Financial and Rainbow Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Rainbow Robotics 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 Rainbow Robotics will offset losses from the drop in Rainbow Robotics' long position.| Shinhan Financial vs. SCI Information Service | Shinhan Financial vs. DataSolution | Shinhan Financial vs. Moadata Co | Shinhan Financial vs. Eugene Technology CoLtd |
| Rainbow Robotics vs. Daewoo Electronic Components | Rainbow Robotics vs. ABCO Electronics Co | Rainbow Robotics vs. SBI Investment KOREA | Rainbow Robotics vs. UJU Electronics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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