Correlation Between SHINHAN FINL and UNIQA Insurance

Can any of the company-specific risk be diversified away by investing in both SHINHAN FINL and UNIQA Insurance 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 SHINHAN FINL and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SHINHAN FINL ADR1 and UNIQA Insurance Group, you can compare the effects of market volatilities on SHINHAN FINL and UNIQA Insurance 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 SHINHAN FINL with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHINHAN FINL and UNIQA Insurance.

Diversification Opportunities for SHINHAN FINL and UNIQA Insurance

0.0

Correlation Coefficient

SHINHAN FINL  UNIQA Insurance

Pay attention - limited upside

The 3 months correlation between SHINHAN and UNIQA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SHINHAN FINL ADR1 and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group and SHINHAN FINL 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 SHINHAN FINL ADR1 are associated (or correlated) with UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of SHINHAN FINL i.e., SHINHAN FINL and UNIQA Insurance go up and down completely randomly.

Pair Corralation between SHINHAN FINL and UNIQA Insurance

If you would invest  758.00  in UNIQA Insurance Group on October 5, 2024 and sell it today you would earn a total of  14.00  from holding UNIQA Insurance Group or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SHINHAN FINL ADR1  vs.  UNIQA Insurance Group

SHINHAN FINL ADR1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHINHAN FINL ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SHINHAN FINL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

UNIQA Insurance Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UNIQA Insurance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SHINHAN FINL and UNIQA Insurance

The main advantage of trading using opposite SHINHAN FINL and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHINHAN FINL position performs unexpectedly, UNIQA Insurance 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 UNIQA Insurance will offset losses from the drop in UNIQA Insurance's long position.

The idea behind SHINHAN FINL ADR1 and UNIQA Insurance Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.