Correlation Between Shinhan Financial and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Sitka Gold 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 Sitka Gold 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 Sitka Gold Corp, you can compare the effects of market volatilities on Shinhan Financial and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Sitka Gold.
Diversification Opportunities for Shinhan Financial and Sitka Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Sitka is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp 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 Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Sitka Gold go up and down completely randomly.
Pair Corralation between Shinhan Financial and Sitka Gold
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.33 times more return on investment than Sitka Gold. However, Shinhan Financial Group is 3.07 times less risky than Sitka Gold. It trades about -0.05 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about -0.07 per unit of risk. If you would invest 4,047 in Shinhan Financial Group on August 28, 2024 and sell it today you would lose (116.00) from holding Shinhan Financial Group or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Sitka Gold Corp
Performance |
| Timeline |
| Shinhan Financial |
| Sitka Gold Corp |
Shinhan Financial and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Sitka Gold
The main advantage of trading using opposite Shinhan Financial and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Sitka Gold 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 Sitka Gold will offset losses from the drop in Sitka Gold'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 |
| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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