Correlation Between INNOX Advanced and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Shinhan Financial Group, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Shinhan Financial.
Diversification Opportunities for INNOX Advanced and Shinhan Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INNOX and Shinhan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and Shinhan Financial go up and down completely randomly.
Pair Corralation between INNOX Advanced and Shinhan Financial
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 3.22 times more return on investment than Shinhan Financial. However, INNOX Advanced is 3.22 times more volatile than Shinhan Financial Group. It trades about 0.43 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.06 per unit of risk. If you would invest 2,069,494 in INNOX Advanced Materials on October 20, 2024 and sell it today you would earn a total of 680,506 from holding INNOX Advanced Materials or generate 32.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Shinhan Financial Group
Performance |
| Timeline |
| INNOX Advanced Materials |
| Shinhan Financial |
INNOX Advanced and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Shinhan Financial
The main advantage of trading using opposite INNOX Advanced and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. Mobile Appliance | INNOX Advanced vs. Inzi Display CoLtd | INNOX Advanced vs. Aprogen Healthcare Games | INNOX Advanced vs. Sangsin Energy Display |
| Shinhan Financial vs. INNOX Advanced Materials | Shinhan Financial vs. Choil Aluminum | Shinhan Financial vs. Ecoplastic | Shinhan Financial vs. Phoenix Materials 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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