Correlation Between Shinhan Financial and Ping An
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Ping An 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 Ping An 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 Ping An Insurance, you can compare the effects of market volatilities on Shinhan Financial and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Ping An.
Diversification Opportunities for Shinhan Financial and Ping An
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Ping is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Ping An go up and down completely randomly.
Pair Corralation between Shinhan Financial and Ping An
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.57 times more return on investment than Ping An. However, Shinhan Financial Group is 1.75 times less risky than Ping An. It trades about 0.06 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Ping An Insurance
Performance |
| Timeline |
| Shinhan Financial |
| Ping An Insurance |
Shinhan Financial and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Ping An
The main advantage of trading using opposite Shinhan Financial and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An'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 |
| Ping An vs. AIA Group | Ping An vs. Jackson Financial | Ping An vs. Sanlam Ltd PK | Ping An vs. CNO Financial 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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