Correlation Between Shinhan Financial and West High
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and West High 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 West High 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 West High Yield, you can compare the effects of market volatilities on Shinhan Financial and West High 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 West High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and West High.
Diversification Opportunities for Shinhan Financial and West High
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and West is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and West High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West High Yield 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 West High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West High Yield has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and West High go up and down completely randomly.
Pair Corralation between Shinhan Financial and West High
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the West High. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 2.51 times less risky than West High. The stock trades about -0.05 of its potential returns per unit of risk. The West High Yield is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 15.00 in West High Yield on August 25, 2024 and sell it today you would earn a total of 3.00 from holding West High Yield or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. West High Yield
Performance |
| Timeline |
| Shinhan Financial |
| West High Yield |
Shinhan Financial and West High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and West High
The main advantage of trading using opposite Shinhan Financial and West High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, West High 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 West High will offset losses from the drop in West High'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 |
| West High vs. BCM Resources | West High vs. Standard Lithium | West High vs. Aurelia Metals Limited | West High vs. Juggernaut Exploration |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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