Correlation Between Shinhan Financial and Bright Minds
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Bright Minds 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 Bright Minds 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 Bright Minds Biosciences, you can compare the effects of market volatilities on Shinhan Financial and Bright Minds 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 Bright Minds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Bright Minds.
Diversification Opportunities for Shinhan Financial and Bright Minds
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Bright is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Bright Minds Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Minds Biosciences 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 Bright Minds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Minds Biosciences has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Bright Minds go up and down completely randomly.
Pair Corralation between Shinhan Financial and Bright Minds
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Bright Minds. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 88.04 times less risky than Bright Minds. The stock trades about -0.06 of its potential returns per unit of risk. The Bright Minds Biosciences is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 117.00 in Bright Minds Biosciences on August 30, 2024 and sell it today you would earn a total of 3,801 from holding Bright Minds Biosciences or generate 3248.72% 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. Bright Minds Biosciences
Performance |
Timeline |
Shinhan Financial |
Bright Minds Biosciences |
Shinhan Financial and Bright Minds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and Bright Minds
The main advantage of trading using opposite Shinhan Financial and Bright Minds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Bright Minds 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 Bright Minds will offset losses from the drop in Bright Minds' 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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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