Correlation Between Shinhan Financial and Fuse Medical
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Fuse Medical 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 Fuse Medical 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 Fuse Medical, you can compare the effects of market volatilities on Shinhan Financial and Fuse Medical 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 Fuse Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Fuse Medical.
Diversification Opportunities for Shinhan Financial and Fuse Medical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Fuse is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Fuse Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuse Medical 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 Fuse Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuse Medical has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Fuse Medical go up and down completely randomly.
Pair Corralation between Shinhan Financial and Fuse Medical
Considering the 90-day investment horizon Shinhan Financial is expected to generate 17.89 times less return on investment than Fuse Medical. But when comparing it to its historical volatility, Shinhan Financial Group is 11.42 times less risky than Fuse Medical. It trades about 0.04 of its potential returns per unit of risk. Fuse Medical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Fuse Medical on September 20, 2024 and sell it today you would lose (3.00) from holding Fuse Medical or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Fuse Medical
Performance |
| Timeline |
| Shinhan Financial |
| Fuse Medical |
Shinhan Financial and Fuse Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Fuse Medical
The main advantage of trading using opposite Shinhan Financial and Fuse Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Fuse Medical 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 Fuse Medical will offset losses from the drop in Fuse Medical's long position.| Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares | Shinhan Financial vs. Foreign Trade Bank |
| Fuse Medical vs. Vivos Therapeutics | Fuse Medical vs. Cerus | Fuse Medical vs. Boston Scientific Corp | Fuse Medical vs. Novacyt SA |
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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