Correlation Between Shinhan Financial and Hargreaves Lansdown
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Hargreaves Lansdown 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 Hargreaves Lansdown 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 Hargreaves Lansdown PLC, you can compare the effects of market volatilities on Shinhan Financial and Hargreaves Lansdown 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 Hargreaves Lansdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Hargreaves Lansdown.
Diversification Opportunities for Shinhan Financial and Hargreaves Lansdown
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Hargreaves is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Hargreaves Lansdown PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Lansdown PLC 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 Hargreaves Lansdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Lansdown PLC has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Hargreaves Lansdown go up and down completely randomly.
Pair Corralation between Shinhan Financial and Hargreaves Lansdown
If you would invest 3,325 in Shinhan Financial Group on September 3, 2024 and sell it today you would earn a total of 533.00 from holding Shinhan Financial Group or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Shinhan Financial Group vs. Hargreaves Lansdown PLC
Performance |
| Timeline |
| Shinhan Financial |
| Hargreaves Lansdown PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Hargreaves Lansdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Hargreaves Lansdown
The main advantage of trading using opposite Shinhan Financial and Hargreaves Lansdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Hargreaves Lansdown 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 Hargreaves Lansdown will offset losses from the drop in Hargreaves Lansdown's long position.| Shinhan Financial vs. JPMorgan Chase Co | Shinhan Financial vs. Citigroup | Shinhan Financial vs. Wells Fargo | Shinhan Financial vs. Toronto Dominion Bank |
| Hargreaves Lansdown vs. Schroders PLC | Hargreaves Lansdown vs. Tri Continental Closed | Hargreaves Lansdown vs. Adams Natural Resources | Hargreaves Lansdown vs. Adams Diversified Equity |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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