Correlation Between Shinhan Financial and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Pan Entertainment 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 Pan Entertainment 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 Pan Entertainment Co, you can compare the effects of market volatilities on Shinhan Financial and Pan Entertainment 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 Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Pan Entertainment.
Diversification Opportunities for Shinhan Financial and Pan Entertainment
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinhan and Pan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment 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 Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Pan Entertainment go up and down completely randomly.
Pair Corralation between Shinhan Financial and Pan Entertainment
Assuming the 90 days trading horizon Shinhan Financial Group is expected to under-perform the Pan Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 1.18 times less risky than Pan Entertainment. The stock trades about -0.21 of its potential returns per unit of risk. The Pan Entertainment Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 200,500 in Pan Entertainment Co on September 26, 2024 and sell it today you would earn a total of 13,500 from holding Pan Entertainment Co or generate 6.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shinhan Financial Group vs. Pan Entertainment Co
Performance |
Timeline |
Shinhan Financial |
Pan Entertainment |
Shinhan Financial and Pan Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and Pan Entertainment
The main advantage of trading using opposite Shinhan Financial and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.Shinhan Financial vs. Samyang Foods Co | Shinhan Financial vs. Handok Clean Tech | Shinhan Financial vs. FOODWELL Co | Shinhan Financial vs. Lotte Non Life Insurance |
Pan Entertainment vs. Alton Sports CoLtd | Pan Entertainment vs. Eagle Veterinary Technology | Pan Entertainment vs. Inzi Display CoLtd | Pan Entertainment vs. Playgram Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Global Correlations Find global opportunities by holding instruments from different markets |