Correlation Between Shinhan Financial and Bright Minds

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Shinhan Financial Group  vs.  Bright Minds Biosciences

 Performance 
       Timeline  
Shinhan Financial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shinhan Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Shinhan Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Bright Minds Biosciences 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bright Minds Biosciences are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Bright Minds reported solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind Shinhan Financial Group and Bright Minds Biosciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Global Correlations
Find global opportunities by holding instruments from different markets
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities