Correlation Between Shinhan Financial and Fortitude Gold
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Fortitude Gold 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 Fortitude Gold 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 Fortitude Gold Corp, you can compare the effects of market volatilities on Shinhan Financial and Fortitude Gold 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 Fortitude Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Fortitude Gold.
Diversification Opportunities for Shinhan Financial and Fortitude Gold
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Fortitude is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Fortitude Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortitude Gold Corp 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 Fortitude Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortitude Gold Corp has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Fortitude Gold go up and down completely randomly.
Pair Corralation between Shinhan Financial and Fortitude Gold
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.96 times more return on investment than Fortitude Gold. However, Shinhan Financial Group is 1.04 times less risky than Fortitude Gold. It trades about 0.1 of its potential returns per unit of risk. Fortitude Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 2,417 in Shinhan Financial Group on August 25, 2024 and sell it today you would earn a total of 1,558 from holding Shinhan Financial Group or generate 64.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Shinhan Financial Group vs. Fortitude Gold Corp
Performance |
| Timeline |
| Shinhan Financial |
| Fortitude Gold Corp |
Shinhan Financial and Fortitude Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Fortitude Gold
The main advantage of trading using opposite Shinhan Financial and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Fortitude Gold 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 Fortitude Gold will offset losses from the drop in Fortitude Gold'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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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