Correlation Between Seoyon Topmetal and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal 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 Seoyon Topmetal and Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoyon Topmetal Co and Shinhan Financial Group, you can compare the effects of market volatilities on Seoyon Topmetal 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 Seoyon Topmetal with a short position of Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Shinhan Financial.
Diversification Opportunities for Seoyon Topmetal and Shinhan Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoyon and Shinhan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal i.e., Seoyon Topmetal and Shinhan Financial go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Shinhan Financial
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 1.02 times more return on investment than Shinhan Financial. However, Seoyon Topmetal is 1.02 times more volatile than Shinhan Financial Group. It trades about -0.13 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.21 per unit of risk. If you would invest 380,500 in Seoyon Topmetal Co on September 26, 2024 and sell it today you would lose (33,000) from holding Seoyon Topmetal Co or give up 8.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Seoyon Topmetal Co vs. Shinhan Financial Group
Performance |
Timeline |
Seoyon Topmetal |
Shinhan Financial |
Seoyon Topmetal and Shinhan Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seoyon Topmetal and Shinhan Financial
The main advantage of trading using opposite Seoyon Topmetal and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal 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.Seoyon Topmetal vs. Woori Technology Investment | Seoyon Topmetal vs. Samsung Card Co | Seoyon Topmetal vs. Korea Real Estate | Seoyon Topmetal vs. CHOROKBAEM PANY Co |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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