Correlation Between Shinhan Financial and Pungguk Ethanol
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Pungguk Ethanol 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 Pungguk Ethanol 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 Pungguk Ethanol Industrial, you can compare the effects of market volatilities on Shinhan Financial and Pungguk Ethanol 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 Pungguk Ethanol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Pungguk Ethanol.
Diversification Opportunities for Shinhan Financial and Pungguk Ethanol
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Pungguk is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Pungguk Ethanol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pungguk Ethanol Indu 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 Pungguk Ethanol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pungguk Ethanol Indu has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Pungguk Ethanol go up and down completely randomly.
Pair Corralation between Shinhan Financial and Pungguk Ethanol
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.96 times more return on investment than Pungguk Ethanol. However, Shinhan Financial Group is 1.05 times less risky than Pungguk Ethanol. It trades about 0.06 of its potential returns per unit of risk. Pungguk Ethanol Industrial is currently generating about -0.03 per unit of risk. If you would invest 3,402,325 in Shinhan Financial Group on September 4, 2024 and sell it today you would earn a total of 1,987,675 from holding Shinhan Financial Group or generate 58.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Pungguk Ethanol Industrial
Performance |
| Timeline |
| Shinhan Financial |
| Pungguk Ethanol Indu |
Shinhan Financial and Pungguk Ethanol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Pungguk Ethanol
The main advantage of trading using opposite Shinhan Financial and Pungguk Ethanol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Pungguk Ethanol 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 Pungguk Ethanol will offset losses from the drop in Pungguk Ethanol's long position.| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
| Pungguk Ethanol vs. Tae Kyung Chemical | Pungguk Ethanol vs. Kukdong Oil Chemicals | Pungguk Ethanol vs. Miwon Chemical | Pungguk Ethanol vs. Daehan Synthetic Fiber |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |