Correlation Between Shinhan Financial and Xenetic Biosciences
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Xenetic Biosciences 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 Xenetic Biosciences 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 Xenetic Biosciences, you can compare the effects of market volatilities on Shinhan Financial and Xenetic Biosciences 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 Xenetic Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Xenetic Biosciences.
Diversification Opportunities for Shinhan Financial and Xenetic Biosciences
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinhan and Xenetic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Xenetic Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenetic Biosciences 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 Xenetic Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenetic Biosciences has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Xenetic Biosciences go up and down completely randomly.
Pair Corralation between Shinhan Financial and Xenetic Biosciences
Considering the 90-day investment horizon Shinhan Financial is expected to generate 91.91 times less return on investment than Xenetic Biosciences. But when comparing it to its historical volatility, Shinhan Financial Group is 38.55 times less risky than Xenetic Biosciences. It trades about 0.05 of its potential returns per unit of risk. Xenetic Biosciences is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Xenetic Biosciences on August 29, 2024 and sell it today you would earn a total of 1,754 from holding Xenetic Biosciences or generate 1753900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 81.45% |
| Values | Daily Returns |
Shinhan Financial Group vs. Xenetic Biosciences
Performance |
| Timeline |
| Shinhan Financial |
| Xenetic Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Xenetic Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Xenetic Biosciences
The main advantage of trading using opposite Shinhan Financial and Xenetic Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Xenetic Biosciences 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 Xenetic Biosciences will offset losses from the drop in Xenetic Biosciences' 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 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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