Correlation Between Shinhan Financial and Monarch Cement
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Monarch Cement 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 Monarch Cement 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 The Monarch Cement, you can compare the effects of market volatilities on Shinhan Financial and Monarch Cement 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 Monarch Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Monarch Cement.
Diversification Opportunities for Shinhan Financial and Monarch Cement
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Monarch is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and The Monarch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Cement 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 Monarch Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Cement has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Monarch Cement go up and down completely randomly.
Pair Corralation between Shinhan Financial and Monarch Cement
Considering the 90-day investment horizon Shinhan Financial is expected to generate 4.6 times less return on investment than Monarch Cement. But when comparing it to its historical volatility, Shinhan Financial Group is 1.53 times less risky than Monarch Cement. It trades about 0.06 of its potential returns per unit of risk. The Monarch Cement is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 19,450 in The Monarch Cement on August 31, 2024 and sell it today you would earn a total of 2,399 from holding The Monarch Cement or generate 12.33% 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. The Monarch Cement
Performance |
| Timeline |
| Shinhan Financial |
| Monarch Cement |
Shinhan Financial and Monarch Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Monarch Cement
The main advantage of trading using opposite Shinhan Financial and Monarch Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Monarch Cement 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 Monarch Cement will offset losses from the drop in Monarch Cement'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 |
| Monarch Cement vs. South32 Limited | Monarch Cement vs. NioCorp Developments Ltd | Monarch Cement vs. HUMANA INC | Monarch Cement vs. SCOR PK |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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