Correlation Between Shinhan Financial and Pulse Seismic
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Pulse Seismic 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 Pulse Seismic 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 Pulse Seismic, you can compare the effects of market volatilities on Shinhan Financial and Pulse Seismic 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 Pulse Seismic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Pulse Seismic.
Diversification Opportunities for Shinhan Financial and Pulse Seismic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Pulse is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Pulse Seismic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulse Seismic 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 Pulse Seismic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulse Seismic has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Pulse Seismic go up and down completely randomly.
Pair Corralation between Shinhan Financial and Pulse Seismic
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 1.09 times more return on investment than Pulse Seismic. However, Shinhan Financial is 1.09 times more volatile than Pulse Seismic. It trades about -0.01 of its potential returns per unit of risk. Pulse Seismic is currently generating about -0.06 per unit of risk. If you would invest 4,074 in Shinhan Financial Group on August 26, 2024 and sell it today you would lose (99.00) from holding Shinhan Financial Group or give up 2.43% 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. Pulse Seismic
Performance |
| Timeline |
| Shinhan Financial |
| Pulse Seismic |
Shinhan Financial and Pulse Seismic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Pulse Seismic
The main advantage of trading using opposite Shinhan Financial and Pulse Seismic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Pulse Seismic 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 Pulse Seismic will offset losses from the drop in Pulse Seismic'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 |
| Pulse Seismic vs. Now Inc | Pulse Seismic vs. Newpark Resources | Pulse Seismic vs. Enerflex | Pulse Seismic vs. Bristow Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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