Correlation Between Lion One and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and SHINHAN FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and SHINHAN FINL ADR1, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and SHINHAN FINL.
Diversification Opportunities for Lion One and SHINHAN FINL
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lion and SHINHAN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and SHINHAN FINL go up and down completely randomly.
Pair Corralation between Lion One and SHINHAN FINL
Assuming the 90 days horizon Lion One Metals is expected to under-perform the SHINHAN FINL. In addition to that, Lion One is 1.64 times more volatile than SHINHAN FINL ADR1. It trades about -0.17 of its total potential returns per unit of risk. SHINHAN FINL ADR1 is currently generating about 0.0 per unit of volatility. If you would invest 3,720 in SHINHAN FINL ADR1 on August 28, 2024 and sell it today you would lose (20.00) from holding SHINHAN FINL ADR1 or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. SHINHAN FINL ADR1
Performance |
| Timeline |
| Lion One Metals |
| SHINHAN FINL ADR1 |
Lion One and SHINHAN FINL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and SHINHAN FINL
The main advantage of trading using opposite Lion One and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Franco Nevada | Lion One vs. Agnico Eagle Mines | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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