Correlation Between Kosdaq Composite and Shinhan Financial
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By analyzing existing cross correlation between Kosdaq Composite Index and Shinhan Financial Group, you can compare the effects of market volatilities on Kosdaq Composite 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 Kosdaq Composite with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Shinhan Financial.
Diversification Opportunities for Kosdaq Composite and Shinhan Financial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kosdaq and Shinhan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Kosdaq Composite 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 Kosdaq Composite Index 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 Kosdaq Composite i.e., Kosdaq Composite and Shinhan Financial go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Shinhan Financial
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Shinhan Financial. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.71 times less risky than Shinhan Financial. The index trades about -0.16 of its potential returns per unit of risk. The Shinhan Financial Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,600,000 in Shinhan Financial Group on August 28, 2024 and sell it today you would lose (170,000) from holding Shinhan Financial Group or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Shinhan Financial Group
Performance |
| Timeline |
Kosdaq Composite and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Shinhan Financial Group
Pair trading matchups for Shinhan Financial
Pair Trading with Kosdaq Composite and Shinhan Financial
The main advantage of trading using opposite Kosdaq Composite and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite 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.| Kosdaq Composite vs. Shinil Electronics Co | Kosdaq Composite vs. Sungdo Engineering Construction | Kosdaq Composite vs. Seoul Electronics Telecom | Kosdaq Composite vs. ENERGYMACHINERY KOREA CoLtd |
| Shinhan Financial vs. Sunny Electronics Corp | Shinhan Financial vs. Miwon Chemicals Co | Shinhan Financial vs. Samyoung Electronics Co | Shinhan Financial vs. Digital Multimedia Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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