Correlation Between Shinhan Financial and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and AAC Clyde 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 Financial and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Financial Group and AAC Clyde Space, you can compare the effects of market volatilities on Shinhan Financial and AAC Clyde 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 Financial with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and AAC Clyde.
Diversification Opportunities for Shinhan Financial and AAC Clyde
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and AAC is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and Shinhan Financial 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 Financial Group are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and AAC Clyde go up and down completely randomly.
Pair Corralation between Shinhan Financial and AAC Clyde
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the AAC Clyde. In addition to that, Shinhan Financial is 5.85 times more volatile than AAC Clyde Space. It trades about -0.21 of its total potential returns per unit of risk. AAC Clyde Space is currently generating about -0.14 per unit of volatility. If you would invest 415.00 in AAC Clyde Space on September 13, 2024 and sell it today you would lose (5.00) from holding AAC Clyde Space or give up 1.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Shinhan Financial Group vs. AAC Clyde Space
Performance |
Timeline |
Shinhan Financial |
AAC Clyde Space |
Shinhan Financial and AAC Clyde Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and AAC Clyde
The main advantage of trading using opposite Shinhan Financial and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.Shinhan Financial vs. Community West Bancshares | Shinhan Financial vs. First Financial Northwest | Shinhan Financial vs. Ponce Financial Group | Shinhan Financial vs. Finwise Bancorp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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