Correlation Between Shinhan Financial and High Performance

Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and High Performance 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 High Performance 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 High Performance Beverages, you can compare the effects of market volatilities on Shinhan Financial and High Performance 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 High Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and High Performance.

Diversification Opportunities for Shinhan Financial and High Performance

0.0

Correlation Coefficient

Shinhan Financial  High Performance

Pay attention - limited upside

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

Pair Corralation between Shinhan Financial and High Performance

If you would invest  3,318  in Shinhan Financial Group on December 27, 2024 and sell it today you would earn a total of  28.00  from holding Shinhan Financial Group or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Shinhan Financial Group  vs.  High Performance Beverages

Shinhan Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shinhan Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Shinhan Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

High Performance Bev

Risk-Adjusted Performance

Very Weak

Over the last 90 days High Performance Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, High Performance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shinhan Financial and High Performance

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

The idea behind Shinhan Financial Group and High Performance Beverages 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.