Correlation Between HEALTHSTREAM (HL5SG) and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) and SHINHAN FINL 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 HEALTHSTREAM (HL5SG) and SHINHAN FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and SHINHAN FINL ADR1, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) and SHINHAN FINL 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 HEALTHSTREAM (HL5SG) with a short position of SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and SHINHAN FINL.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and SHINHAN FINL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between HEALTHSTREAM and SHINHAN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and SHINHAN FINL ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINHAN FINL ADR1 and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM are associated (or correlated) with SHINHAN FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINHAN FINL ADR1 has no effect on the direction of HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and SHINHAN FINL go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and SHINHAN FINL
Assuming the 90 days trading horizon HEALTHSTREAM (HL5SG) is expected to generate 1.02 times less return on investment than SHINHAN FINL. But when comparing it to its historical volatility, HEALTHSTREAM is 1.15 times less risky than SHINHAN FINL. It trades about 0.05 of its potential returns per unit of risk. SHINHAN FINL ADR1 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,458 in SHINHAN FINL ADR1 on November 6, 2024 and sell it today you would earn a total of 922.00 from holding SHINHAN FINL ADR1 or generate 37.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
HEALTHSTREAM vs. SHINHAN FINL ADR1
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| SHINHAN FINL ADR1 |
HEALTHSTREAM (HL5SG) and SHINHAN FINL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and SHINHAN FINL
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) position performs unexpectedly, SHINHAN FINL 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 FINL will offset losses from the drop in SHINHAN FINL's long position.| HEALTHSTREAM (HL5SG) vs. CHIBA BANK | HEALTHSTREAM (HL5SG) vs. China Communications Services | HEALTHSTREAM (HL5SG) vs. Carnegie Clean Energy | HEALTHSTREAM (HL5SG) vs. TELECOM ITALRISP ADR10 |
| SHINHAN FINL vs. Haverty Furniture Companies | SHINHAN FINL vs. Hisense Home Appliances | SHINHAN FINL vs. GungHo Online Entertainment | SHINHAN FINL vs. Treasury Wine Estates |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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