Correlation Between Sewoon Medical and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical 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 Sewoon Medical and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sewoon Medical Co and Shinhan Financial Group, you can compare the effects of market volatilities on Sewoon Medical 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 Sewoon Medical with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Shinhan Financial.
Diversification Opportunities for Sewoon Medical and Shinhan Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sewoon and Shinhan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical i.e., Sewoon Medical and Shinhan Financial go up and down completely randomly.
Pair Corralation between Sewoon Medical and Shinhan Financial
Assuming the 90 days trading horizon Sewoon Medical Co is expected to under-perform the Shinhan Financial. But the stock apears to be less risky and, when comparing its historical volatility, Sewoon Medical Co is 1.29 times less risky than Shinhan Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Shinhan Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,138,933 in Shinhan Financial Group on August 28, 2024 and sell it today you would earn a total of 2,501,067 from holding Shinhan Financial Group or generate 79.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Shinhan Financial Group
Performance |
| Timeline |
| Sewoon Medical |
| Shinhan Financial |
Sewoon Medical and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Shinhan Financial
The main advantage of trading using opposite Sewoon Medical and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical 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.| Sewoon Medical vs. Medy Tox | Sewoon Medical vs. Busan Industrial Co | Sewoon Medical vs. Busan Ind | Sewoon Medical vs. Mirae Asset Daewoo |
| Shinhan Financial vs. Sunny Electronics Corp | Shinhan Financial vs. Miwon Chemicals Co | Shinhan Financial vs. Samyoung Electronics Co | Shinhan Financial vs. Digital Multimedia Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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