Correlation Between Shinhan Financial and Troika Media
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Troika Media 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 Troika Media 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 Troika Media Group, you can compare the effects of market volatilities on Shinhan Financial and Troika Media 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 Troika Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Troika Media.
Diversification Opportunities for Shinhan Financial and Troika Media
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinhan and Troika is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Troika Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troika Media Group 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 Troika Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troika Media Group has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Troika Media go up and down completely randomly.
Pair Corralation between Shinhan Financial and Troika Media
Considering the 90-day investment horizon Shinhan Financial is expected to generate 19.54 times less return on investment than Troika Media. But when comparing it to its historical volatility, Shinhan Financial Group is 10.2 times less risky than Troika Media. It trades about 0.04 of its potential returns per unit of risk. Troika Media Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.01 in Troika Media Group on August 28, 2024 and sell it today you would lose (0.51) from holding Troika Media Group or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 27.73% |
| Values | Daily Returns |
Shinhan Financial Group vs. Troika Media Group
Performance |
| Timeline |
| Shinhan Financial |
| Troika Media Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Troika Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Troika Media
The main advantage of trading using opposite Shinhan Financial and Troika Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Troika Media 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 Troika Media will offset losses from the drop in Troika Media'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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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