Correlation Between Shinhan Financial and Pharvaris
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Pharvaris 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 Pharvaris 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 Pharvaris BV, you can compare the effects of market volatilities on Shinhan Financial and Pharvaris 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 Pharvaris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Pharvaris.
Diversification Opportunities for Shinhan Financial and Pharvaris
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Pharvaris is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Pharvaris BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharvaris BV 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 Pharvaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharvaris BV has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Pharvaris go up and down completely randomly.
Pair Corralation between Shinhan Financial and Pharvaris
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.43 times more return on investment than Pharvaris. However, Shinhan Financial Group is 2.35 times less risky than Pharvaris. It trades about 0.06 of its potential returns per unit of risk. Pharvaris BV is currently generating about -0.08 per unit of risk. If you would invest 3,933 in Shinhan Financial Group on August 31, 2024 and sell it today you would earn a total of 93.00 from holding Shinhan Financial Group or generate 2.36% 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. Pharvaris BV
Performance |
| Timeline |
| Shinhan Financial |
| Pharvaris BV |
Shinhan Financial and Pharvaris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Pharvaris
The main advantage of trading using opposite Shinhan Financial and Pharvaris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Pharvaris 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 Pharvaris will offset losses from the drop in Pharvaris' 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 |
| Pharvaris vs. Cue Biopharma | Pharvaris vs. Eliem Therapeutics | Pharvaris vs. Inhibrx | Pharvaris vs. Molecular Partners AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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