Correlation Between WILLIS LEASE and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and SHINHAN FINL 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 WILLIS LEASE and SHINHAN FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WILLIS LEASE FIN and SHINHAN FINL ADR1, you can compare the effects of market volatilities on WILLIS LEASE and SHINHAN FINL 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 WILLIS LEASE with a short position of SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and SHINHAN FINL.
Diversification Opportunities for WILLIS LEASE and SHINHAN FINL
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WILLIS and SHINHAN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and SHINHAN FINL ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINHAN FINL ADR1 and WILLIS LEASE 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 WILLIS LEASE FIN are associated (or correlated) with SHINHAN FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINHAN FINL ADR1 has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and SHINHAN FINL go up and down completely randomly.
Pair Corralation between WILLIS LEASE and SHINHAN FINL
Assuming the 90 days horizon WILLIS LEASE FIN is expected to under-perform the SHINHAN FINL. But the stock apears to be less risky and, when comparing its historical volatility, WILLIS LEASE FIN is 1.05 times less risky than SHINHAN FINL. The stock trades about -0.32 of its potential returns per unit of risk. The SHINHAN FINL ADR1 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,120 in SHINHAN FINL ADR1 on November 1, 2024 and sell it today you would earn a total of 100.00 from holding SHINHAN FINL ADR1 or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. SHINHAN FINL ADR1
Performance |
| Timeline |
| WILLIS LEASE FIN |
| SHINHAN FINL ADR1 |
WILLIS LEASE and SHINHAN FINL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and SHINHAN FINL
The main advantage of trading using opposite WILLIS LEASE and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, SHINHAN FINL 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 FINL will offset losses from the drop in SHINHAN FINL's long position.| WILLIS LEASE vs. Summit Hotel Properties | WILLIS LEASE vs. PENN Entertainment | WILLIS LEASE vs. RCS MediaGroup SpA | WILLIS LEASE vs. SQUIRREL MEDIA SA |
| SHINHAN FINL vs. WILLIS LEASE FIN | SHINHAN FINL vs. CARSALESCOM | SHINHAN FINL vs. Zijin Mining Group | SHINHAN FINL vs. Air Lease |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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