Correlation Between E Mart and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both E Mart 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 E Mart and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Mart and Shinhan Financial Group, you can compare the effects of market volatilities on E Mart 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 E Mart with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Mart and Shinhan Financial.
Diversification Opportunities for E Mart and Shinhan Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 139480 and Shinhan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding E Mart and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and E Mart 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 E Mart 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 E Mart i.e., E Mart and Shinhan Financial go up and down completely randomly.
Pair Corralation between E Mart and Shinhan Financial
Assuming the 90 days trading horizon E Mart is expected to generate 2.51 times less return on investment than Shinhan Financial. But when comparing it to its historical volatility, E Mart is 1.23 times less risky than Shinhan Financial. It trades about 0.03 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,603,938 in Shinhan Financial Group on August 30, 2024 and sell it today you would earn a total of 746,062 from holding Shinhan Financial Group or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Mart vs. Shinhan Financial Group
Performance |
| Timeline |
| E Mart |
| Shinhan Financial |
E Mart and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Mart and Shinhan Financial
The main advantage of trading using opposite E Mart and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Mart 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.| E Mart vs. Hyundai Home Shopping | E Mart vs. Woori Technology | E Mart vs. BIT Computer Co | E Mart vs. Eagle Veterinary Technology |
| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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