Correlation Between Shinhan Financial and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Shinhan Financial and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Eagle Veterinary.
Diversification Opportunities for Shinhan Financial and Eagle Veterinary
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Eagle is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Shinhan Financial and Eagle Veterinary
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Eagle Veterinary. In addition to that, Shinhan Financial is 1.64 times more volatile than Eagle Veterinary Technology. It trades about -0.25 of its total potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.22 per unit of volatility. If you would invest 460,500 in Eagle Veterinary Technology on December 8, 2024 and sell it today you would lose (22,500) from holding Eagle Veterinary Technology or give up 4.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Shinhan Financial |
| Eagle Veterinary Tec |
Shinhan Financial and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Eagle Veterinary
The main advantage of trading using opposite Shinhan Financial and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Shinhan Financial vs. Nable Communications | Shinhan Financial vs. Union Materials Corp | Shinhan Financial vs. Neungyule Education | Shinhan Financial vs. Samsung Publishing Co |
| Eagle Veterinary vs. Sangsin Energy Display | Eagle Veterinary vs. PLAYWITH | Eagle Veterinary vs. SK Telecom Co | Eagle Veterinary vs. PlayD 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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