Correlation Between Shinhan Financial and Etao International
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Etao International 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 Etao International 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 Etao International Co,, you can compare the effects of market volatilities on Shinhan Financial and Etao International 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 Etao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Etao International.
Diversification Opportunities for Shinhan Financial and Etao International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Etao is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Etao International Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etao International Co, 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 Etao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etao International Co, has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Etao International go up and down completely randomly.
Pair Corralation between Shinhan Financial and Etao International
If you would invest 5.00 in Etao International Co, on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Etao International Co, or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Shinhan Financial Group vs. Etao International Co,
Performance |
| Timeline |
| Shinhan Financial |
| Etao International Co, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Etao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Etao International
The main advantage of trading using opposite Shinhan Financial and Etao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Etao International 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 Etao International will offset losses from the drop in Etao International's long position.| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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