Correlation Between Shinhan Financial and Compagnie
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Compagnie 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 Compagnie 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 Compagnie de Saint Gobain, you can compare the effects of market volatilities on Shinhan Financial and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Compagnie.
Diversification Opportunities for Shinhan Financial and Compagnie
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Compagnie is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Compagnie go up and down completely randomly.
Pair Corralation between Shinhan Financial and Compagnie
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Compagnie. In addition to that, Shinhan Financial is 2.82 times more volatile than Compagnie de Saint Gobain. It trades about -0.02 of its total potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.19 per unit of volatility. If you would invest 8,625 in Compagnie de Saint Gobain on August 31, 2024 and sell it today you would earn a total of 835.00 from holding Compagnie de Saint Gobain or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| Shinhan Financial |
| Compagnie de Saint |
Shinhan Financial and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Compagnie
The main advantage of trading using opposite Shinhan Financial and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie'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 |
| Compagnie vs. Antelope Enterprise Holdings | Compagnie vs. Azek Company | Compagnie vs. AAON Inc | Compagnie vs. GMS Inc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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