Correlation Between Shinhan Financial and Diffusion Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Diffusion Pharmaceuticals 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 Diffusion Pharmaceuticals 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 Diffusion Pharmaceuticals, you can compare the effects of market volatilities on Shinhan Financial and Diffusion Pharmaceuticals 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 Diffusion Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Diffusion Pharmaceuticals.
Diversification Opportunities for Shinhan Financial and Diffusion Pharmaceuticals
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shinhan and Diffusion is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Diffusion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diffusion Pharmaceuticals 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 Diffusion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diffusion Pharmaceuticals has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Diffusion Pharmaceuticals go up and down completely randomly.
Pair Corralation between Shinhan Financial and Diffusion Pharmaceuticals
If you would invest 3,401 in Shinhan Financial Group on August 29, 2024 and sell it today you would earn a total of 625.00 from holding Shinhan Financial Group or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Shinhan Financial Group vs. Diffusion Pharmaceuticals
Performance |
| Timeline |
| Shinhan Financial |
| Diffusion Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Diffusion Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Diffusion Pharmaceuticals
The main advantage of trading using opposite Shinhan Financial and Diffusion Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Diffusion Pharmaceuticals 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 Diffusion Pharmaceuticals will offset losses from the drop in Diffusion Pharmaceuticals' 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 |
| Diffusion Pharmaceuticals vs. Bio Path Holdings | Diffusion Pharmaceuticals vs. Capricor Therapeutics | Diffusion Pharmaceuticals vs. NextCure | Diffusion Pharmaceuticals vs. Tonix Pharmaceuticals Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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