Correlation Between Shinhan Financial and Kuk Young
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Kuk Young 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 Kuk Young 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 Kuk Young GM, you can compare the effects of market volatilities on Shinhan Financial and Kuk Young 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 Kuk Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Kuk Young.
Diversification Opportunities for Shinhan Financial and Kuk Young
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Kuk is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Kuk Young GM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuk Young GM 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 Kuk Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuk Young GM has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Kuk Young go up and down completely randomly.
Pair Corralation between Shinhan Financial and Kuk Young
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Kuk Young. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 4.49 times less risky than Kuk Young. The stock trades about -0.02 of its potential returns per unit of risk. The Kuk Young GM is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 204,500 in Kuk Young GM on September 4, 2024 and sell it today you would lose (12,800) from holding Kuk Young GM or give up 6.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Kuk Young GM
Performance |
| Timeline |
| Shinhan Financial |
| Kuk Young GM |
Shinhan Financial and Kuk Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Kuk Young
The main advantage of trading using opposite Shinhan Financial and Kuk Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Kuk Young 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 Kuk Young will offset losses from the drop in Kuk Young's long position.| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
| Kuk Young vs. Dong A Steel Technology | Kuk Young vs. Korea Information Communications | Kuk Young vs. Mobileleader CoLtd | Kuk Young vs. Koh Young Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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