Correlation Between Shinhan Financial and Onconetix
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Onconetix 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 Onconetix 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 Onconetix, you can compare the effects of market volatilities on Shinhan Financial and Onconetix 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 Onconetix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Onconetix.
Diversification Opportunities for Shinhan Financial and Onconetix
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Onconetix is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Onconetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onconetix 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 Onconetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onconetix has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Onconetix go up and down completely randomly.
Pair Corralation between Shinhan Financial and Onconetix
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.25 times more return on investment than Onconetix. However, Shinhan Financial Group is 4.07 times less risky than Onconetix. It trades about -0.01 of its potential returns per unit of risk. Onconetix is currently generating about -0.78 per unit of risk. If you would invest 4,047 in Shinhan Financial Group on August 28, 2024 and sell it today you would lose (43.00) from holding Shinhan Financial Group or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Onconetix
Performance |
| Timeline |
| Shinhan Financial |
| Onconetix |
Shinhan Financial and Onconetix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Onconetix
The main advantage of trading using opposite Shinhan Financial and Onconetix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Onconetix 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 Onconetix will offset losses from the drop in Onconetix's long position.| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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