Correlation Between Shinhan Financial and RCABS
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and RCABS 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 RCABS 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 RCABS Inc, you can compare the effects of market volatilities on Shinhan Financial and RCABS 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 RCABS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and RCABS.
Diversification Opportunities for Shinhan Financial and RCABS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and RCABS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and RCABS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCABS Inc 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 RCABS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCABS Inc has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and RCABS go up and down completely randomly.
Pair Corralation between Shinhan Financial and RCABS
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.24 times more return on investment than RCABS. However, Shinhan Financial Group is 4.25 times less risky than RCABS. It trades about -0.01 of its potential returns per unit of risk. RCABS Inc is currently generating about -0.02 per unit of risk. If you would invest 4,047 in Shinhan Financial Group on August 27, 2024 and sell it today you would lose (43.00) from holding Shinhan Financial Group or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. RCABS Inc
Performance |
| Timeline |
| Shinhan Financial |
| RCABS Inc |
Shinhan Financial and RCABS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and RCABS
The main advantage of trading using opposite Shinhan Financial and RCABS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, RCABS 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 RCABS will offset losses from the drop in RCABS's long position.| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |