Correlation Between ENF Technology and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both ENF 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 ENF 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 ENF Technology Co and Shinhan Financial Group, you can compare the effects of market volatilities on ENF 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 ENF Technology with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and Shinhan Financial.
Diversification Opportunities for ENF Technology and Shinhan Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ENF and Shinhan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ENF 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 ENF 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 ENF 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 ENF Technology i.e., ENF Technology and Shinhan Financial go up and down completely randomly.
Pair Corralation between ENF Technology and Shinhan Financial
Assuming the 90 days trading horizon ENF Technology Co is expected to generate 4.33 times more return on investment than Shinhan Financial. However, ENF Technology is 4.33 times more volatile than Shinhan Financial Group. It trades about 0.31 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.31 per unit of risk. If you would invest 1,682,000 in ENF Technology Co on October 29, 2024 and sell it today you would earn a total of 363,000 from holding ENF Technology Co or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENF Technology Co vs. Shinhan Financial Group
Performance |
| Timeline |
| ENF Technology |
| Shinhan Financial |
ENF Technology and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and Shinhan Financial
The main advantage of trading using opposite ENF Technology and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF 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.| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
| Shinhan Financial vs. Hanil Chemical Ind | Shinhan Financial vs. Hanwha Chemical Corp | Shinhan Financial vs. BIT Computer Co | Shinhan Financial vs. CG Hi Tech |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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