Correlation Between Magyar Bancorp and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Magyar 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 Magyar 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 Magyar Bancorp and Shinhan Financial Group, you can compare the effects of market volatilities on Magyar 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 Magyar Bancorp with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and Shinhan Financial.
Diversification Opportunities for Magyar Bancorp and Shinhan Financial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and Shinhan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Magyar 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 Magyar 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 Magyar 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 Magyar Bancorp i.e., Magyar Bancorp and Shinhan Financial go up and down completely randomly.
Pair Corralation between Magyar Bancorp and Shinhan Financial
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 0.4 times more return on investment than Shinhan Financial. However, Magyar Bancorp is 2.52 times less risky than Shinhan Financial. It trades about 0.43 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.01 per unit of risk. If you would invest 1,232 in Magyar Bancorp on August 28, 2024 and sell it today you would earn a total of 93.00 from holding Magyar Bancorp or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Bancorp vs. Shinhan Financial Group
Performance |
| Timeline |
| Magyar Bancorp |
| Shinhan Financial |
Magyar Bancorp and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and Shinhan Financial
The main advantage of trading using opposite Magyar Bancorp and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar 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.| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest Bancorp |
| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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