Correlation Between Shinhan Financial and GreenLight Biosciences
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and GreenLight Biosciences 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 GreenLight Biosciences 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 GreenLight Biosciences Holdings, you can compare the effects of market volatilities on Shinhan Financial and GreenLight Biosciences 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 GreenLight Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and GreenLight Biosciences.
Diversification Opportunities for Shinhan Financial and GreenLight Biosciences
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and GreenLight is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and GreenLight Biosciences Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenLight Biosciences 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 GreenLight Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenLight Biosciences has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and GreenLight Biosciences go up and down completely randomly.
Pair Corralation between Shinhan Financial and GreenLight Biosciences
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.12 times more return on investment than GreenLight Biosciences. However, Shinhan Financial Group is 8.05 times less risky than GreenLight Biosciences. It trades about 0.04 of its potential returns per unit of risk. GreenLight Biosciences Holdings is currently generating about -0.02 per unit of risk. If you would invest 2,950 in Shinhan Financial Group on August 31, 2024 and sell it today you would earn a total of 1,076 from holding Shinhan Financial Group or generate 36.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 22.01% |
| Values | Daily Returns |
Shinhan Financial Group vs. GreenLight Biosciences Holding
Performance |
| Timeline |
| Shinhan Financial |
| GreenLight Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and GreenLight Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and GreenLight Biosciences
The main advantage of trading using opposite Shinhan Financial and GreenLight Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, GreenLight Biosciences 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 GreenLight Biosciences will offset losses from the drop in GreenLight Biosciences' 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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