Correlation Between Shinhan Financial and LianDi Clean
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and LianDi Clean 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 LianDi Clean 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 LianDi Clean Technology, you can compare the effects of market volatilities on Shinhan Financial and LianDi Clean 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 LianDi Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and LianDi Clean.
Diversification Opportunities for Shinhan Financial and LianDi Clean
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and LianDi is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and LianDi Clean Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianDi Clean Technology 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 LianDi Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianDi Clean Technology has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and LianDi Clean go up and down completely randomly.
Pair Corralation between Shinhan Financial and LianDi Clean
If you would invest 2,440 in Shinhan Financial Group on January 12, 2025 and sell it today you would earn a total of 806.00 from holding Shinhan Financial Group or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. LianDi Clean Technology
Performance |
| Timeline |
| Shinhan Financial |
| LianDi Clean Technology |
Shinhan Financial and LianDi Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and LianDi Clean
The main advantage of trading using opposite Shinhan Financial and LianDi Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, LianDi Clean 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 LianDi Clean will offset losses from the drop in LianDi Clean'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 |
| LianDi Clean vs. Enerflex | LianDi Clean vs. Natural Gas Services | LianDi Clean vs. Archrock | LianDi Clean vs. Geospace Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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