Correlation Between Shinhan Financial and Lipocine
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Shinhan Financial and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Lipocine.
Diversification Opportunities for Shinhan Financial and Lipocine
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Lipocine is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Lipocine go up and down completely randomly.
Pair Corralation between Shinhan Financial and Lipocine
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.36 times more return on investment than Lipocine. However, Shinhan Financial Group is 2.79 times less risky than Lipocine. It trades about 0.04 of its potential returns per unit of risk. Lipocine is currently generating about 0.0 per unit of risk. If you would invest 2,978 in Shinhan Financial Group on September 3, 2024 and sell it today you would earn a total of 908.00 from holding Shinhan Financial Group or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Lipocine
Performance |
| Timeline |
| Shinhan Financial |
| Lipocine |
Shinhan Financial and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Lipocine
The main advantage of trading using opposite Shinhan Financial and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Shinhan Financial vs. JPMorgan Chase Co | Shinhan Financial vs. Citigroup | Shinhan Financial vs. Wells Fargo | Shinhan Financial vs. Toronto Dominion Bank |
| Lipocine vs. DiaMedica Therapeutics | Lipocine vs. Lyra Therapeutics | Lipocine vs. Centessa Pharmaceuticals PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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