Correlation Between Handok Clean and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Handok Clean 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 Handok Clean and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Shinhan Financial Group, you can compare the effects of market volatilities on Handok Clean 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 Handok Clean with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Shinhan Financial.
Diversification Opportunities for Handok Clean and Shinhan Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Handok and Shinhan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Handok Clean 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 Handok Clean Tech 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 Handok Clean i.e., Handok Clean and Shinhan Financial go up and down completely randomly.
Pair Corralation between Handok Clean and Shinhan Financial
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 0.91 times more return on investment than Shinhan Financial. However, Handok Clean Tech is 1.1 times less risky than Shinhan Financial. It trades about 0.5 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.03 per unit of risk. If you would invest 578,073 in Handok Clean Tech on October 14, 2024 and sell it today you would earn a total of 68,927 from holding Handok Clean Tech or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Shinhan Financial Group
Performance |
| Timeline |
| Handok Clean Tech |
| Shinhan Financial |
Handok Clean and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Shinhan Financial
The main advantage of trading using opposite Handok Clean and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean 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.| Handok Clean vs. Hanjoo Light Metal | Handok Clean vs. Kbi Metal Co | Handok Clean vs. Daiyang Metal Co | Handok Clean vs. SungMoon Electronics 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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