Correlation Between Shinhan Financial and Orbit Drop
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Orbit Drop 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 Orbit Drop 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 Orbit Drop, you can compare the effects of market volatilities on Shinhan Financial and Orbit Drop 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 Orbit Drop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Orbit Drop.
Diversification Opportunities for Shinhan Financial and Orbit Drop
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Orbit is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Orbit Drop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Drop 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 Orbit Drop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Drop has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Orbit Drop go up and down completely randomly.
Pair Corralation between Shinhan Financial and Orbit Drop
Considering the 90-day investment horizon Shinhan Financial is expected to generate 240.23 times less return on investment than Orbit Drop. But when comparing it to its historical volatility, Shinhan Financial Group is 79.78 times less risky than Orbit Drop. It trades about 0.05 of its potential returns per unit of risk. Orbit Drop is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Orbit Drop on September 4, 2024 and sell it today you would earn a total of 0.01 from holding Orbit Drop or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 15.76% |
| Values | Daily Returns |
Shinhan Financial Group vs. Orbit Drop
Performance |
| Timeline |
| Shinhan Financial |
| Orbit Drop |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Orbit Drop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Orbit Drop
The main advantage of trading using opposite Shinhan Financial and Orbit Drop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Orbit Drop 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 Orbit Drop will offset losses from the drop in Orbit Drop'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 |
| Orbit Drop vs. Hooker Furniture | Orbit Drop vs. Arm Holdings plc | Orbit Drop vs. Valens | Orbit Drop vs. Mid Atlantic Home Health |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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