Correlation Between Shinhan Financial and First Tractor
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and First Tractor 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 First Tractor 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 First Tractor Co, you can compare the effects of market volatilities on Shinhan Financial and First Tractor 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 First Tractor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and First Tractor.
Diversification Opportunities for Shinhan Financial and First Tractor
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and First Tractor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tractor 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 First Tractor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tractor has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and First Tractor go up and down completely randomly.
Pair Corralation between Shinhan Financial and First Tractor
If you would invest 3,782 in Shinhan Financial Group on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Shinhan Financial Group or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shinhan Financial Group vs. First Tractor Co
Performance |
| Timeline |
| Shinhan Financial |
| First Tractor |
Shinhan Financial and First Tractor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and First Tractor
The main advantage of trading using opposite Shinhan Financial and First Tractor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, First Tractor 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 First Tractor will offset losses from the drop in First Tractor'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 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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