Correlation Between Shinhan Financial and Cyclo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Cyclo Therapeutics 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 Cyclo Therapeutics 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 Cyclo Therapeutics, you can compare the effects of market volatilities on Shinhan Financial and Cyclo Therapeutics 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 Cyclo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Cyclo Therapeutics.
Diversification Opportunities for Shinhan Financial and Cyclo Therapeutics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Cyclo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Cyclo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclo Therapeutics 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 Cyclo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclo Therapeutics has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Cyclo Therapeutics go up and down completely randomly.
Pair Corralation between Shinhan Financial and Cyclo Therapeutics
Considering the 90-day investment horizon Shinhan Financial is expected to generate 3.48 times less return on investment than Cyclo Therapeutics. But when comparing it to its historical volatility, Shinhan Financial Group is 5.82 times less risky than Cyclo Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Cyclo Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Cyclo Therapeutics on August 28, 2024 and sell it today you would lose (43.00) from holding Cyclo Therapeutics or give up 75.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Cyclo Therapeutics
Performance |
| Timeline |
| Shinhan Financial |
| Cyclo Therapeutics |
Shinhan Financial and Cyclo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Cyclo Therapeutics
The main advantage of trading using opposite Shinhan Financial and Cyclo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Cyclo Therapeutics 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 Cyclo Therapeutics will offset losses from the drop in Cyclo Therapeutics' long position.| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
| Cyclo Therapeutics vs. Eliem Therapeutics | Cyclo Therapeutics vs. HCW Biologics | Cyclo Therapeutics vs. Scpharmaceuticals | Cyclo Therapeutics vs. Milestone Pharmaceuticals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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