Correlation Between Shinhan Financial and Lifecore Biomedical
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Lifecore Biomedical 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 Lifecore Biomedical 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 Lifecore Biomedical, you can compare the effects of market volatilities on Shinhan Financial and Lifecore Biomedical 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 Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Lifecore Biomedical.
Diversification Opportunities for Shinhan Financial and Lifecore Biomedical
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Lifecore is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical 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 Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Lifecore Biomedical go up and down completely randomly.
Pair Corralation between Shinhan Financial and Lifecore Biomedical
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Lifecore Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 2.54 times less risky than Lifecore Biomedical. The stock trades about -0.06 of its potential returns per unit of risk. The Lifecore Biomedical is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Lifecore Biomedical on August 31, 2024 and sell it today you would earn a total of 257.00 from holding Lifecore Biomedical or generate 52.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Lifecore Biomedical
Performance |
| Timeline |
| Shinhan Financial |
| Lifecore Biomedical |
Shinhan Financial and Lifecore Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Lifecore Biomedical
The main advantage of trading using opposite Shinhan Financial and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Lifecore Biomedical 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 Lifecore Biomedical will offset losses from the drop in Lifecore Biomedical'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 |
| Lifecore Biomedical vs. Bausch Health Companies | Lifecore Biomedical vs. Haleon plc | Lifecore Biomedical vs. Intracellular Th |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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