Correlation Between Shinhan Financial and Great Elm
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Great Elm 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 Great Elm 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 Great Elm Capital, you can compare the effects of market volatilities on Shinhan Financial and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Great Elm.
Diversification Opportunities for Shinhan Financial and Great Elm
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Great is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Great Elm go up and down completely randomly.
Pair Corralation between Shinhan Financial and Great Elm
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 3.39 times more return on investment than Great Elm. However, Shinhan Financial is 3.39 times more volatile than Great Elm Capital. It trades about 0.05 of its potential returns per unit of risk. Great Elm Capital is currently generating about 0.06 per unit of risk. If you would invest 2,595 in Shinhan Financial Group on August 30, 2024 and sell it today you would earn a total of 1,431 from holding Shinhan Financial Group or generate 55.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Shinhan Financial Group vs. Great Elm Capital
Performance |
| Timeline |
| Shinhan Financial |
| Great Elm Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Great Elm
The main advantage of trading using opposite Shinhan Financial and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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