Correlation Between Shinhan Financial and BGNE Old
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and BGNE Old 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 BGNE Old 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 BGNE Old, you can compare the effects of market volatilities on Shinhan Financial and BGNE Old 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 BGNE Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and BGNE Old.
Diversification Opportunities for Shinhan Financial and BGNE Old
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and BGNE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and BGNE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGNE Old 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 BGNE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGNE Old has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and BGNE Old go up and down completely randomly.
Pair Corralation between Shinhan Financial and BGNE Old
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.59 times more return on investment than BGNE Old. However, Shinhan Financial Group is 1.7 times less risky than BGNE Old. It trades about -0.15 of its potential returns per unit of risk. BGNE Old is currently generating about -0.19 per unit of risk. If you would invest 3,868 in Shinhan Financial Group on November 3, 2024 and sell it today you would lose (366.00) from holding Shinhan Financial Group or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 51.22% |
| Values | Daily Returns |
Shinhan Financial Group vs. BGNE Old
Performance |
| Timeline |
| Shinhan Financial |
| BGNE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and BGNE Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and BGNE Old
The main advantage of trading using opposite Shinhan Financial and BGNE Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, BGNE Old 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 BGNE Old will offset losses from the drop in BGNE Old'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 |
| BGNE Old vs. Ascendis Pharma AS | BGNE Old vs. Apellis Pharmaceuticals | BGNE Old vs. Akero Therapeutics | BGNE Old vs. Blueprint Medicines Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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