Correlation Between Visa and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Visa and Shinhan Financial 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 Visa and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Shinhan Financial Group, you can compare the effects of market volatilities on Visa and Shinhan Financial 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 Visa with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Shinhan Financial.
Diversification Opportunities for Visa and Shinhan Financial
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Shinhan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and Visa 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 Visa Class A are associated (or correlated) with Shinhan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Financial has no effect on the direction of Visa i.e., Visa and Shinhan Financial go up and down completely randomly.
Pair Corralation between Visa and Shinhan Financial
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than Shinhan Financial. However, Visa Class A is 2.06 times less risky than Shinhan Financial. It trades about 0.34 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.04 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Shinhan Financial Group
Performance |
| Timeline |
| Visa Class A |
| Shinhan Financial |
Visa and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Shinhan Financial
The main advantage of trading using opposite Visa and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Shinhan Financial 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 Shinhan Financial will offset losses from the drop in Shinhan Financial's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Shinhan Financial vs. AptaBio Therapeutics | Shinhan Financial vs. Daewoo SBI SPAC | Shinhan Financial vs. Dream Security co | Shinhan Financial vs. Microfriend |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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