Correlation Between Shinhan Financial and Atlantic Wind
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Atlantic Wind 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 Atlantic Wind 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 Atlantic Wind Solar, you can compare the effects of market volatilities on Shinhan Financial and Atlantic Wind 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 Atlantic Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Atlantic Wind.
Diversification Opportunities for Shinhan Financial and Atlantic Wind
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Atlantic is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Atlantic Wind Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Wind Solar 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 Atlantic Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Wind Solar has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Atlantic Wind go up and down completely randomly.
Pair Corralation between Shinhan Financial and Atlantic Wind
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Atlantic Wind. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 5.95 times less risky than Atlantic Wind. The stock trades about -0.13 of its potential returns per unit of risk. The Atlantic Wind Solar is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2.75 in Atlantic Wind Solar on November 4, 2024 and sell it today you would earn a total of 1.41 from holding Atlantic Wind Solar or generate 51.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Atlantic Wind Solar
Performance |
| Timeline |
| Shinhan Financial |
| Atlantic Wind Solar |
Shinhan Financial and Atlantic Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Atlantic Wind
The main advantage of trading using opposite Shinhan Financial and Atlantic Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Atlantic Wind 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 Atlantic Wind will offset losses from the drop in Atlantic Wind'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 |
| Atlantic Wind vs. Green Stream Holdings | Atlantic Wind vs. VirExit Technologies | Atlantic Wind vs. Clean Vision Corp | Atlantic Wind vs. SolarWindow Technologies |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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