Correlation Between Shinhan Financial and TSI
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and TSI 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 TSI 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 TSI Co, you can compare the effects of market volatilities on Shinhan Financial and TSI 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 TSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and TSI.
Diversification Opportunities for Shinhan Financial and TSI
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and TSI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and TSI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSI Co 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 TSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSI Co has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and TSI go up and down completely randomly.
Pair Corralation between Shinhan Financial and TSI
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the TSI. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 2.39 times less risky than TSI. The stock trades about -0.03 of its potential returns per unit of risk. The TSI Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 498,500 in TSI Co on October 12, 2024 and sell it today you would earn a total of 59,500 from holding TSI Co or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. TSI Co
Performance |
| Timeline |
| Shinhan Financial |
| TSI Co |
Shinhan Financial and TSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and TSI
The main advantage of trading using opposite Shinhan Financial and TSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, TSI 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 TSI will offset losses from the drop in TSI's long position.| Shinhan Financial vs. Hanmi Semiconductor Co | Shinhan Financial vs. ITM Semiconductor Co | Shinhan Financial vs. Seoul Electronics Telecom | Shinhan Financial vs. Nable Communications |
| TSI vs. Shinhan Financial Group | TSI vs. Lake Materials Co | TSI vs. Hana Financial | TSI vs. INNOX Advanced Materials |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |