Correlation Between Shinhan Financial and Withuspharmaceutical
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Withuspharmaceutical 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 Withuspharmaceutical 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 Withuspharmaceutical CoLtd, you can compare the effects of market volatilities on Shinhan Financial and Withuspharmaceutical 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 Withuspharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Withuspharmaceutical.
Diversification Opportunities for Shinhan Financial and Withuspharmaceutical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and Withuspharmaceutical is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Withuspharmaceutical CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Withuspharmaceutical 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 Withuspharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Withuspharmaceutical has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Withuspharmaceutical go up and down completely randomly.
Pair Corralation between Shinhan Financial and Withuspharmaceutical
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 1.17 times more return on investment than Withuspharmaceutical. However, Shinhan Financial is 1.17 times more volatile than Withuspharmaceutical CoLtd. It trades about -0.06 of its potential returns per unit of risk. Withuspharmaceutical CoLtd is currently generating about -0.07 per unit of risk. If you would invest 5,800,000 in Shinhan Financial Group on August 26, 2024 and sell it today you would lose (230,000) from holding Shinhan Financial Group or give up 3.97% 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. Withuspharmaceutical CoLtd
Performance |
| Timeline |
| Shinhan Financial |
| Withuspharmaceutical |
Shinhan Financial and Withuspharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Withuspharmaceutical
The main advantage of trading using opposite Shinhan Financial and Withuspharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Withuspharmaceutical 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 Withuspharmaceutical will offset losses from the drop in Withuspharmaceutical's long position.| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
| Withuspharmaceutical vs. Sewoon Medical Co | Withuspharmaceutical vs. Hana Financial | Withuspharmaceutical vs. Pureun Mutual Savings | Withuspharmaceutical vs. Shinhan Financial Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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