Correlation Between Shinhan Financial and Geberit AG
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Geberit AG 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 Geberit AG 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 Geberit AG ADR, you can compare the effects of market volatilities on Shinhan Financial and Geberit AG 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 Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Geberit AG.
Diversification Opportunities for Shinhan Financial and Geberit AG
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Geberit is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Geberit AG go up and down completely randomly.
Pair Corralation between Shinhan Financial and Geberit AG
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Geberit AG. In addition to that, Shinhan Financial is 1.26 times more volatile than Geberit AG ADR. It trades about -0.02 of its total potential returns per unit of risk. Geberit AG ADR is currently generating about 0.0 per unit of volatility. If you would invest 5,957 in Geberit AG ADR on August 30, 2024 and sell it today you would lose (23.00) from holding Geberit AG ADR or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Geberit AG ADR
Performance |
| Timeline |
| Shinhan Financial |
| Geberit AG ADR |
Shinhan Financial and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Geberit AG
The main advantage of trading using opposite Shinhan Financial and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG's long position.| Shinhan Financial vs. Community West Bancshares | Shinhan Financial vs. First Financial Northwest | Shinhan Financial vs. Ponce Financial Group | Shinhan Financial vs. Finwise Bancorp |
| Geberit AG vs. DSV Panalpina AS | Geberit AG vs. SGS SA | Geberit AG vs. Givaudan SA ADR | Geberit AG vs. Kuehne Nagel International |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |