Correlation Between Shinhan Financial and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and AmTrust 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 Shinhan Financial and AmTrust Financial 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 AmTrust Financial Services, you can compare the effects of market volatilities on Shinhan Financial and AmTrust 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 Shinhan Financial with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and AmTrust Financial.
Diversification Opportunities for Shinhan Financial and AmTrust Financial
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and AmTrust is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial 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 AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and AmTrust Financial go up and down completely randomly.
Pair Corralation between Shinhan Financial and AmTrust Financial
Considering the 90-day investment horizon Shinhan Financial is expected to generate 1.38 times less return on investment than AmTrust Financial. But when comparing it to its historical volatility, Shinhan Financial Group is 1.29 times less risky than AmTrust Financial. It trades about 0.02 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,198 in AmTrust Financial Services on October 24, 2024 and sell it today you would earn a total of 217.00 from holding AmTrust Financial Services or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Shinhan Financial Group vs. AmTrust Financial Services
Performance |
| Timeline |
| Shinhan Financial |
| AmTrust Financial |
Shinhan Financial and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and AmTrust Financial
The main advantage of trading using opposite Shinhan Financial and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, AmTrust 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 AmTrust Financial will offset losses from the drop in AmTrust Financial'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 |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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