Correlation Between Shinhan Financial and Anadolu Efes

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

Diversification Opportunities for Shinhan Financial and Anadolu Efes

-0.7

Correlation Coefficient

Shinhan Financial  Anadolu Efes

Excellent diversification

The 3 months correlation between Shinhan and Anadolu is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik 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 Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Anadolu Efes go up and down completely randomly.

Pair Corralation between Shinhan Financial and Anadolu Efes

Considering the 90-day investment horizon Shinhan Financial Group is expected to under-perform the Anadolu Efes. But the stock apears to be less risky and, when comparing its historical volatility, Shinhan Financial Group is 1.71 times less risky than Anadolu Efes. The stock trades about -0.21 of its potential returns per unit of risk. The Anadolu Efes Biracilik is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  122.00  in Anadolu Efes Biracilik on September 26, 2024 and sell it today you would earn a total of  14.00  from holding Anadolu Efes Biracilik or generate 11.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Shinhan Financial Group  vs.  Anadolu Efes Biracilik

Shinhan Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shinhan Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Anadolu Efes Biracilik

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Anadolu Efes showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shinhan Financial and Anadolu Efes

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

The idea behind Shinhan Financial Group and Anadolu Efes Biracilik 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..