Correlation Between Shinhan Financial and Close Brothers
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Close Brothers 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 Close Brothers 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 Close Brothers Group, you can compare the effects of market volatilities on Shinhan Financial and Close Brothers 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 Close Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Close Brothers.
Diversification Opportunities for Shinhan Financial and Close Brothers
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Close is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Close Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Close Brothers Group 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 Close Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Close Brothers Group has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Close Brothers go up and down completely randomly.
Pair Corralation between Shinhan Financial and Close Brothers
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.52 times more return on investment than Close Brothers. However, Shinhan Financial Group is 1.93 times less risky than Close Brothers. It trades about 0.06 of its potential returns per unit of risk. Close Brothers Group is currently generating about -0.22 per unit of risk. If you would invest 3,933 in Shinhan Financial Group on August 31, 2024 and sell it today you would earn a total of 93.00 from holding Shinhan Financial Group or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Close Brothers Group
Performance |
| Timeline |
| Shinhan Financial |
| Close Brothers Group |
Shinhan Financial and Close Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Close Brothers
The main advantage of trading using opposite Shinhan Financial and Close Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Close Brothers 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 Close Brothers will offset losses from the drop in Close Brothers' 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 |
| Close Brothers vs. Peoples Bancorp | Close Brothers vs. Primis Financial Corp | Close Brothers vs. ConnectOne Bancorp | Close Brothers vs. LINKBANCORP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |