Correlation Between Shinhan Financial and Avidian Gold
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Avidian Gold 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 Avidian Gold 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 Avidian Gold Corp, you can compare the effects of market volatilities on Shinhan Financial and Avidian Gold 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 Avidian Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Avidian Gold.
Diversification Opportunities for Shinhan Financial and Avidian Gold
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Avidian is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Avidian Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidian Gold Corp 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 Avidian Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidian Gold Corp has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Avidian Gold go up and down completely randomly.
Pair Corralation between Shinhan Financial and Avidian Gold
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Avidian Gold. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 10.84 times less risky than Avidian Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Avidian Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9.62 in Avidian Gold Corp on September 3, 2024 and sell it today you would lose (0.36) from holding Avidian Gold Corp or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shinhan Financial Group vs. Avidian Gold Corp
Performance |
| Timeline |
| Shinhan Financial |
| Avidian Gold Corp |
Shinhan Financial and Avidian Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Avidian Gold
The main advantage of trading using opposite Shinhan Financial and Avidian Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Avidian Gold 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 Avidian Gold will offset losses from the drop in Avidian Gold's long position.| Shinhan Financial vs. JPMorgan Chase Co | Shinhan Financial vs. Citigroup | Shinhan Financial vs. Wells Fargo | Shinhan Financial vs. Toronto Dominion Bank |
| Avidian Gold vs. Harmony Gold Mining | Avidian Gold vs. SPACE | Avidian Gold vs. T Rowe Price | Avidian Gold vs. Ampleforth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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