Correlation Between Shinhan Financial and Talaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Talaris Therapeutics 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 Financial and Talaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Financial Group and Talaris Therapeutics, you can compare the effects of market volatilities on Shinhan Financial and Talaris Therapeutics 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 Financial with a short position of Talaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Talaris Therapeutics.
Diversification Opportunities for Shinhan Financial and Talaris Therapeutics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Talaris is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Talaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talaris Therapeutics and Shinhan Financial 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 Financial Group are associated (or correlated) with Talaris Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talaris Therapeutics has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Talaris Therapeutics go up and down completely randomly.
Pair Corralation between Shinhan Financial and Talaris Therapeutics
Considering the 90-day investment horizon Shinhan Financial is expected to generate 10.15 times less return on investment than Talaris Therapeutics. But when comparing it to its historical volatility, Shinhan Financial Group is 2.56 times less risky than Talaris Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Talaris Therapeutics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Talaris Therapeutics on September 24, 2024 and sell it today you would earn a total of 189.00 from holding Talaris Therapeutics or generate 173.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 28.11% |
Values | Daily Returns |
Shinhan Financial Group vs. Talaris Therapeutics
Performance |
Timeline |
Shinhan Financial |
Talaris Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinhan Financial and Talaris Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and Talaris Therapeutics
The main advantage of trading using opposite Shinhan Financial and Talaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Talaris Therapeutics 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 Talaris Therapeutics will offset losses from the drop in Talaris Therapeutics' long position.Shinhan Financial vs. Banco De Chile | Shinhan Financial vs. Orix Corp Ads | Shinhan Financial vs. SK Telecom 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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