Correlation Between Shinhan Financial and Santos
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Santos 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 Santos 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 Santos Ltd ADR, you can compare the effects of market volatilities on Shinhan Financial and Santos 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 Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Santos.
Diversification Opportunities for Shinhan Financial and Santos
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Santos is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Santos Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos Ltd ADR 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 Santos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos Ltd ADR has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Santos go up and down completely randomly.
Pair Corralation between Shinhan Financial and Santos
If you would invest 3,782 in Shinhan Financial Group on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Shinhan Financial Group or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Shinhan Financial Group vs. Santos Ltd ADR
Performance |
| Timeline |
| Shinhan Financial |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Santos
The main advantage of trading using opposite Shinhan Financial and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Santos 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 Santos will offset losses from the drop in Santos' long position.| Shinhan Financial vs. Banco Santander Brasil | Shinhan Financial vs. CrossFirst Bankshares | Shinhan Financial vs. Banco Bradesco SA | Shinhan Financial vs. CF Bankshares |
| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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