Correlation Between Shinhan Financial and Covalon Technologies
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Covalon Technologies 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 Covalon Technologies 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 Covalon Technologies, you can compare the effects of market volatilities on Shinhan Financial and Covalon Technologies 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 Covalon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Covalon Technologies.
Diversification Opportunities for Shinhan Financial and Covalon Technologies
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Covalon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Covalon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covalon Technologies 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 Covalon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covalon Technologies has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Covalon Technologies go up and down completely randomly.
Pair Corralation between Shinhan Financial and Covalon Technologies
Considering the 90-day investment horizon Shinhan Financial is expected to generate 3.9 times less return on investment than Covalon Technologies. But when comparing it to its historical volatility, Shinhan Financial Group is 1.86 times less risky than Covalon Technologies. It trades about 0.06 of its potential returns per unit of risk. Covalon Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Covalon Technologies on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Covalon Technologies or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Covalon Technologies
Performance |
| Timeline |
| Shinhan Financial |
| Covalon Technologies |
Shinhan Financial and Covalon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Covalon Technologies
The main advantage of trading using opposite Shinhan Financial and Covalon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Covalon Technologies 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 Covalon Technologies will offset losses from the drop in Covalon Technologies' long position.| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
| Covalon Technologies vs. Biotron Limited | Covalon Technologies vs. biOasis Technologies | Covalon Technologies vs. Mosaic Immunoengineering | Covalon Technologies vs. Cellectis SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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