Correlation Between Shinhan Financial and Telo Genomics
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Telo Genomics 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 Telo Genomics 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 Telo Genomics Corp, you can compare the effects of market volatilities on Shinhan Financial and Telo Genomics 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 Telo Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Telo Genomics.
Diversification Opportunities for Shinhan Financial and Telo Genomics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Telo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Telo Genomics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telo Genomics 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 Telo Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telo Genomics Corp has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Telo Genomics go up and down completely randomly.
Pair Corralation between Shinhan Financial and Telo Genomics
Considering the 90-day investment horizon Shinhan Financial is expected to generate 1.27 times less return on investment than Telo Genomics. But when comparing it to its historical volatility, Shinhan Financial Group is 4.26 times less risky than Telo Genomics. It trades about 0.05 of its potential returns per unit of risk. Telo Genomics Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Telo Genomics Corp on August 30, 2024 and sell it today you would lose (17.60) from holding Telo Genomics Corp or give up 65.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Telo Genomics Corp
Performance |
| Timeline |
| Shinhan Financial |
| Telo Genomics Corp |
Shinhan Financial and Telo Genomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Telo Genomics
The main advantage of trading using opposite Shinhan Financial and Telo Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Telo Genomics 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 Telo Genomics will offset losses from the drop in Telo Genomics' 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 |
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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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