Correlation Between Shinhan Financial and PICC Property
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and PICC Property 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 PICC Property 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 PICC Property and, you can compare the effects of market volatilities on Shinhan Financial and PICC Property 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 PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and PICC Property.
Diversification Opportunities for Shinhan Financial and PICC Property
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and PICC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and PICC Property go up and down completely randomly.
Pair Corralation between Shinhan Financial and PICC Property
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.47 times more return on investment than PICC Property. However, Shinhan Financial Group is 2.13 times less risky than PICC Property. It trades about -0.01 of its potential returns per unit of risk. PICC Property and is currently generating about -0.04 per unit of risk. If you would invest 4,047 in Shinhan Financial Group on August 27, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. PICC Property and
Performance |
| Timeline |
| Shinhan Financial |
| PICC Property |
Shinhan Financial and PICC Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and PICC Property
The main advantage of trading using opposite Shinhan Financial and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property'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 |
| PICC Property vs. Progressive Corp | PICC Property vs. White Mountains Insurance | PICC Property vs. Chubb | PICC Property vs. W R Berkley |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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