Correlation Between NewFlex Technology and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Shinhan Financial 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 NewFlex Technology and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Shinhan Financial Group, you can compare the effects of market volatilities on NewFlex Technology and Shinhan Financial 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 NewFlex Technology with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Shinhan Financial.
Diversification Opportunities for NewFlex Technology and Shinhan Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NewFlex and Shinhan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and NewFlex Technology 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 NewFlex Technology Co are associated (or correlated) with Shinhan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Financial has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Shinhan Financial go up and down completely randomly.
Pair Corralation between NewFlex Technology and Shinhan Financial
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the Shinhan Financial. In addition to that, NewFlex Technology is 1.58 times more volatile than Shinhan Financial Group. It trades about -0.08 of its total potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 4,460,716 in Shinhan Financial Group on September 3, 2024 and sell it today you would earn a total of 929,284 from holding Shinhan Financial Group or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Shinhan Financial Group
Performance |
| Timeline |
| NewFlex Technology |
| Shinhan Financial |
NewFlex Technology and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Shinhan Financial
The main advantage of trading using opposite NewFlex Technology and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Shinhan Financial 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 Shinhan Financial will offset losses from the drop in Shinhan Financial's long position.| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
| Shinhan Financial vs. Dongil Technology | Shinhan Financial vs. Jeong Moon Information | Shinhan Financial vs. Koh Young Technology | Shinhan Financial vs. Eugene Technology CoLtd |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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