Correlation Between DONGKUK TED and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED 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 DONGKUK TED and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Shinhan Financial Group, you can compare the effects of market volatilities on DONGKUK TED 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 DONGKUK TED with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Shinhan Financial.
Diversification Opportunities for DONGKUK TED and Shinhan Financial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DONGKUK and Shinhan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and DONGKUK TED 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 DONGKUK TED METAL 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 DONGKUK TED i.e., DONGKUK TED and Shinhan Financial go up and down completely randomly.
Pair Corralation between DONGKUK TED and Shinhan Financial
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 1.4 times more return on investment than Shinhan Financial. However, DONGKUK TED is 1.4 times more volatile than Shinhan Financial Group. It trades about 0.3 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 596,000 in DONGKUK TED METAL on November 1, 2024 and sell it today you would earn a total of 38,000 from holding DONGKUK TED METAL or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Shinhan Financial Group
Performance |
| Timeline |
| DONGKUK TED METAL |
| Shinhan Financial |
DONGKUK TED and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Shinhan Financial
The main advantage of trading using opposite DONGKUK TED and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED 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.| DONGKUK TED vs. Sempio Foods Co | DONGKUK TED vs. EV Advanced Material | DONGKUK TED vs. Hana Materials | DONGKUK TED vs. LAKE MATERIALS LTD |
| Shinhan Financial vs. Duksan Hi Metal | Shinhan Financial vs. Dongil Metal Co | Shinhan Financial vs. DONGKUK TED METAL | Shinhan Financial vs. Youngsin Metal Industrial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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