Correlation Between Tway Air and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Tway Air 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 Tway Air and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Shinhan Financial Group, you can compare the effects of market volatilities on Tway Air 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 Tway Air with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Shinhan Financial.
Diversification Opportunities for Tway Air and Shinhan Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tway and Shinhan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air 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 Tway Air 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 Tway Air 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 Tway Air i.e., Tway Air and Shinhan Financial go up and down completely randomly.
Pair Corralation between Tway Air and Shinhan Financial
Assuming the 90 days trading horizon Tway Air Co is expected to generate 1.37 times more return on investment than Shinhan Financial. However, Tway Air is 1.37 times more volatile than Shinhan Financial Group. It trades about -0.02 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.09 per unit of risk. If you would invest 294,000 in Tway Air Co on October 15, 2024 and sell it today you would lose (19,500) from holding Tway Air Co or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Shinhan Financial Group
Performance |
| Timeline |
| Tway Air |
| Shinhan Financial |
Tway Air and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Shinhan Financial
The main advantage of trading using opposite Tway Air and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air 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.| Tway Air vs. SBI Investment KOREA | Tway Air vs. LG Chemicals | Tway Air vs. Hotel Shilla Co | Tway Air vs. Daelim Trading Co |
| Shinhan Financial vs. Incar Financial Service | Shinhan Financial vs. TS Investment Corp | Shinhan Financial vs. Hana Financial | Shinhan Financial vs. ABOV Semiconductor 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |