Correlation Between OPKO HEALTH and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH 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 OPKO HEALTH and SHINHAN FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and SHINHAN FINL ADR1, you can compare the effects of market volatilities on OPKO HEALTH 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 OPKO HEALTH with a short position of SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and SHINHAN FINL.
Diversification Opportunities for OPKO HEALTH and SHINHAN FINL
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OPKO and SHINHAN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH i.e., OPKO HEALTH and SHINHAN FINL go up and down completely randomly.
Pair Corralation between OPKO HEALTH and SHINHAN FINL
Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 8.9 times less return on investment than SHINHAN FINL. But when comparing it to its historical volatility, OPKO HEALTH is 3.55 times less risky than SHINHAN FINL. It trades about 0.06 of its potential returns per unit of risk. SHINHAN FINL ADR1 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,180 in SHINHAN FINL ADR1 on November 6, 2024 and sell it today you would earn a total of 200.00 from holding SHINHAN FINL ADR1 or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. SHINHAN FINL ADR1
Performance |
| Timeline |
| OPKO HEALTH |
| SHINHAN FINL ADR1 |
OPKO HEALTH and SHINHAN FINL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and SHINHAN FINL
The main advantage of trading using opposite OPKO HEALTH and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH 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.| OPKO HEALTH vs. DATANG INTL POW | OPKO HEALTH vs. Columbia Sportswear | OPKO HEALTH vs. Datadog | OPKO HEALTH vs. NTT DATA |
| SHINHAN FINL vs. Haverty Furniture Companies | SHINHAN FINL vs. Hisense Home Appliances | SHINHAN FINL vs. GungHo Online Entertainment | SHINHAN FINL vs. Treasury Wine Estates |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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