Correlation Between Shinhan Financial and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and DONGKUK TED 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 DONGKUK TED 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 DONGKUK TED METAL, you can compare the effects of market volatilities on Shinhan Financial and DONGKUK TED 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 DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and DONGKUK TED.
Diversification Opportunities for Shinhan Financial and DONGKUK TED
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and DONGKUK is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and DONGKUK TED go up and down completely randomly.
Pair Corralation between Shinhan Financial and DONGKUK TED
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.8 times more return on investment than DONGKUK TED. However, Shinhan Financial Group is 1.25 times less risky than DONGKUK TED. It trades about 0.39 of its potential returns per unit of risk. DONGKUK TED METAL is currently generating about 0.26 per unit of risk. If you would invest 4,775,000 in Shinhan Financial Group on November 3, 2024 and sell it today you would earn a total of 335,000 from holding Shinhan Financial Group or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. DONGKUK TED METAL
Performance |
| Timeline |
| Shinhan Financial |
| DONGKUK TED METAL |
Shinhan Financial and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and DONGKUK TED
The main advantage of trading using opposite Shinhan Financial and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED's long position.| Shinhan Financial vs. System and Application | Shinhan Financial vs. Neungyule Education | Shinhan Financial vs. Daishin Information Communications | Shinhan Financial vs. YeaRimDang Publishing Co |
| DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. LG Energy Solution | DONGKUK TED vs. SK Hynix |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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