Correlation Between Shinhan Financial and Xilio Development
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Xilio Development 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 Xilio Development 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 Xilio Development, you can compare the effects of market volatilities on Shinhan Financial and Xilio Development 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 Xilio Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Xilio Development.
Diversification Opportunities for Shinhan Financial and Xilio Development
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Xilio is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development 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 Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Xilio Development go up and down completely randomly.
Pair Corralation between Shinhan Financial and Xilio Development
Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Xilio Development. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 5.41 times less risky than Xilio Development. The stock trades about -0.05 of its potential returns per unit of risk. The Xilio Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Xilio Development on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Xilio Development or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Xilio Development
Performance |
| Timeline |
| Shinhan Financial |
| Xilio Development |
Shinhan Financial and Xilio Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Xilio Development
The main advantage of trading using opposite Shinhan Financial and Xilio Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Xilio Development 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 Xilio Development will offset losses from the drop in Xilio Development's 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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