Correlation Between Shinhan Financial and West Vault
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and West Vault 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 Vault 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 Vault Mining, you can compare the effects of market volatilities on Shinhan Financial and West Vault 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 Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and West Vault.
Diversification Opportunities for Shinhan Financial and West Vault
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and West is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and West Vault Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Vault Mining 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 Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Vault Mining has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and West Vault go up and down completely randomly.
Pair Corralation between Shinhan Financial and West Vault
Considering the 90-day investment horizon Shinhan Financial Group is expected to generate 0.38 times more return on investment than West Vault. However, Shinhan Financial Group is 2.66 times less risky than West Vault. It trades about -0.05 of its potential returns per unit of risk. West Vault Mining is currently generating about -0.26 per unit of risk. If you would invest 4,047 in Shinhan Financial Group on August 29, 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. West Vault Mining
Performance |
| Timeline |
| Shinhan Financial |
| West Vault Mining |
Shinhan Financial and West Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and West Vault
The main advantage of trading using opposite Shinhan Financial and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, West Vault 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 Vault will offset losses from the drop in West Vault's long position.| Shinhan Financial vs. Home Federal Bancorp | Shinhan Financial vs. First Northwest Bancorp | Shinhan Financial vs. First Financial Northwest | Shinhan Financial vs. First Capital |
| West Vault vs. Aurelius Minerals | West Vault vs. Quebec Precious Metals | West Vault vs. Omineca Mining and | West Vault vs. Altamira 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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