Correlation Between FOODWELL and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both FOODWELL 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 FOODWELL and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Shinhan Financial Group, you can compare the effects of market volatilities on FOODWELL 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 FOODWELL with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Shinhan Financial.
Diversification Opportunities for FOODWELL and Shinhan Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FOODWELL and Shinhan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial and FOODWELL 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 FOODWELL Co 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 FOODWELL i.e., FOODWELL and Shinhan Financial go up and down completely randomly.
Pair Corralation between FOODWELL and Shinhan Financial
Assuming the 90 days trading horizon FOODWELL is expected to generate 12.69 times less return on investment than Shinhan Financial. But when comparing it to its historical volatility, FOODWELL Co is 1.23 times less risky than Shinhan Financial. It trades about 0.0 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,561,146 in Shinhan Financial Group on September 26, 2024 and sell it today you would earn a total of 1,378,854 from holding Shinhan Financial Group or generate 38.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FOODWELL Co vs. Shinhan Financial Group
Performance |
Timeline |
FOODWELL |
Shinhan Financial |
FOODWELL and Shinhan Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FOODWELL and Shinhan Financial
The main advantage of trading using opposite FOODWELL and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL 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.FOODWELL vs. Woori Financial Group | FOODWELL vs. Jb Financial | FOODWELL vs. Nh Investment And | FOODWELL vs. Kumho Petro Chemical |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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