Correlation Between Shinhan Financial and Dyne Therapeutics
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Dyne 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 Dyne 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 Dyne Therapeutics, you can compare the effects of market volatilities on Shinhan Financial and Dyne 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 Dyne Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Dyne Therapeutics.
Diversification Opportunities for Shinhan Financial and Dyne Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Dyne is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Dyne Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dyne 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 Dyne Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dyne Therapeutics has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Dyne Therapeutics go up and down completely randomly.
Pair Corralation between Shinhan Financial and Dyne Therapeutics
Considering the 90-day investment horizon Shinhan Financial is expected to generate 2.95 times less return on investment than Dyne Therapeutics. But when comparing it to its historical volatility, Shinhan Financial Group is 2.5 times less risky than Dyne Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Dyne Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,147 in Dyne Therapeutics on August 26, 2024 and sell it today you would earn a total of 1,822 from holding Dyne Therapeutics or generate 158.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Dyne Therapeutics
Performance |
| Timeline |
| Shinhan Financial |
| Dyne Therapeutics |
Shinhan Financial and Dyne Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Dyne Therapeutics
The main advantage of trading using opposite Shinhan Financial and Dyne Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Dyne 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 Dyne Therapeutics will offset losses from the drop in Dyne 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 |
| Dyne Therapeutics vs. Stoke Therapeutics | Dyne Therapeutics vs. Pliant Therapeutics | Dyne Therapeutics vs. Cytokinetics | Dyne Therapeutics vs. Revolution Medicines |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |