Correlation Between Finwise Bancorp and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Finwise Bancorp 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 Finwise Bancorp and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finwise Bancorp and Shinhan Financial Group, you can compare the effects of market volatilities on Finwise Bancorp 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 Finwise Bancorp with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finwise Bancorp and Shinhan Financial.
Diversification Opportunities for Finwise Bancorp and Shinhan Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finwise and Shinhan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Finwise Bancorp and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Finwise Bancorp 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 Finwise Bancorp 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 Finwise Bancorp i.e., Finwise Bancorp and Shinhan Financial go up and down completely randomly.
Pair Corralation between Finwise Bancorp and Shinhan Financial
Given the investment horizon of 90 days Finwise Bancorp is expected to under-perform the Shinhan Financial. In addition to that, Finwise Bancorp is 1.99 times more volatile than Shinhan Financial Group. It trades about -0.03 of its total potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.1 per unit of volatility. If you would invest 3,373 in Shinhan Financial Group on October 20, 2024 and sell it today you would earn a total of 81.00 from holding Shinhan Financial Group or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finwise Bancorp vs. Shinhan Financial Group
Performance |
| Timeline |
| Finwise Bancorp |
| Shinhan Financial |
Finwise Bancorp and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finwise Bancorp and Shinhan Financial
The main advantage of trading using opposite Finwise Bancorp and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finwise Bancorp 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.| Finwise Bancorp vs. Home Federal Bancorp | Finwise Bancorp vs. First Financial Northwest | Finwise Bancorp vs. First Northwest Bancorp | Finwise Bancorp vs. First Capital |
| Shinhan Financial vs. Community West Bancshares | Shinhan Financial vs. First Financial Northwest | Shinhan Financial vs. Ponce Financial Group | Shinhan Financial vs. Finwise Bancorp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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