Correlation Between SHINHAN FINL and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both SHINHAN FINL and CECO ENVIRONMENTAL 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 SHINHAN FINL and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHINHAN FINL ADR1 and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on SHINHAN FINL and CECO ENVIRONMENTAL 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 SHINHAN FINL with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHINHAN FINL and CECO ENVIRONMENTAL.
Diversification Opportunities for SHINHAN FINL and CECO ENVIRONMENTAL
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHINHAN and CECO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SHINHAN FINL ADR1 and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and SHINHAN FINL 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 SHINHAN FINL ADR1 are associated (or correlated) with CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of SHINHAN FINL i.e., SHINHAN FINL and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between SHINHAN FINL and CECO ENVIRONMENTAL
Assuming the 90 days trading horizon SHINHAN FINL ADR1 is expected to generate 0.43 times more return on investment than CECO ENVIRONMENTAL. However, SHINHAN FINL ADR1 is 2.3 times less risky than CECO ENVIRONMENTAL. It trades about 0.09 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about -0.03 per unit of risk. If you would invest 3,120 in SHINHAN FINL ADR1 on November 1, 2024 and sell it today you would earn a total of 100.00 from holding SHINHAN FINL ADR1 or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHINHAN FINL ADR1 vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| SHINHAN FINL ADR1 |
| CECO ENVIRONMENTAL |
SHINHAN FINL and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHINHAN FINL and CECO ENVIRONMENTAL
The main advantage of trading using opposite SHINHAN FINL and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHINHAN FINL position performs unexpectedly, CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL will offset losses from the drop in CECO ENVIRONMENTAL's long position.| SHINHAN FINL vs. WILLIS LEASE FIN | SHINHAN FINL vs. CARSALESCOM | SHINHAN FINL vs. Zijin Mining Group | SHINHAN FINL vs. Air Lease |
| CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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