Correlation Between Armada Hflr and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both Armada Hflr 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 Armada Hflr and SHINHAN FINL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and SHINHAN FINL ADR1, you can compare the effects of market volatilities on Armada Hflr 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 Armada Hflr with a short position of SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and SHINHAN FINL.
Diversification Opportunities for Armada Hflr and SHINHAN FINL
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armada and SHINHAN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr 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 Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and SHINHAN FINL go up and down completely randomly.
Pair Corralation between Armada Hflr and SHINHAN FINL
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the SHINHAN FINL. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.75 times less risky than SHINHAN FINL. The stock trades about -0.03 of its potential returns per unit of risk. The SHINHAN FINL ADR1 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,148 in SHINHAN FINL ADR1 on September 26, 2024 and sell it today you would earn a total of 72.00 from holding SHINHAN FINL ADR1 or generate 2.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.66% |
Values | Daily Returns |
Armada Hflr Pr vs. SHINHAN FINL ADR1
Performance |
Timeline |
Armada Hflr Pr |
SHINHAN FINL ADR1 |
Armada Hflr and SHINHAN FINL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Armada Hflr and SHINHAN FINL
The main advantage of trading using opposite Armada Hflr and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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.Armada Hflr vs. Realty Income | Armada Hflr vs. Park Hotels Resorts | Armada Hflr vs. Power REIT | Armada Hflr vs. Urban Edge Properties |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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