Correlation Between Shinhan Financial and Hyundai
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on Shinhan Financial and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Hyundai.
Diversification Opportunities for Shinhan Financial and Hyundai
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Hyundai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Hyundai go up and down completely randomly.
Pair Corralation between Shinhan Financial and Hyundai
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Hyundai. In addition to that, Shinhan Financial is 1.47 times more volatile than Hyundai Motor Co. It trades about -0.26 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.1 per unit of volatility. If you would invest 15,740,000 in Hyundai Motor Co on September 24, 2024 and sell it today you would lose (660,000) from holding Hyundai Motor Co or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Hyundai Motor Co
Performance |
| Timeline |
| Shinhan Financial |
| Hyundai Motor |
Shinhan Financial and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Hyundai
The main advantage of trading using opposite Shinhan Financial and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Wonbang Tech Co | Shinhan Financial vs. Busan Industrial Co | Shinhan Financial vs. Busan Ind |
| Hyundai vs. Puloon Technology | Hyundai vs. Dgb Financial | Hyundai vs. Shinhan Financial Group | Hyundai vs. Guyoung Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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