Correlation Between Shinhan Financial and Astra International
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Astra International 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 Astra International 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 Astra International Tbk, you can compare the effects of market volatilities on Shinhan Financial and Astra International 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 Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Astra International.
Diversification Opportunities for Shinhan Financial and Astra International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinhan and Astra is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Astra International go up and down completely randomly.
Pair Corralation between Shinhan Financial and Astra International
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.87 times more return on investment than Astra International. However, Shinhan Financial Group is 1.14 times less risky than Astra International. It trades about 0.1 of its potential returns per unit of risk. Astra International Tbk is currently generating about -0.05 per unit of risk. If you would invest 3,368 in Shinhan Financial Group on November 9, 2024 and sell it today you would earn a total of 88.00 from holding Shinhan Financial Group or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Astra International Tbk
Performance |
| Timeline |
| Shinhan Financial |
| Astra International Tbk |
Shinhan Financial and Astra International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Astra International
The main advantage of trading using opposite Shinhan Financial and Astra International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Astra International 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 Astra International will offset losses from the drop in Astra International'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 |
| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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