Correlation Between Shinhan Financial and Biotron
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Biotron 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 Biotron 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 Biotron Limited, you can compare the effects of market volatilities on Shinhan Financial and Biotron 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 Biotron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Biotron.
Diversification Opportunities for Shinhan Financial and Biotron
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinhan and Biotron is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Biotron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotron Limited 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 Biotron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotron Limited has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Biotron go up and down completely randomly.
Pair Corralation between Shinhan Financial and Biotron
Considering the 90-day investment horizon Shinhan Financial is expected to generate 39.38 times less return on investment than Biotron. But when comparing it to its historical volatility, Shinhan Financial Group is 24.46 times less risky than Biotron. It trades about 0.03 of its potential returns per unit of risk. Biotron Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.08 in Biotron Limited on February 20, 2024 and sell it today you would lose (2.48) from holding Biotron Limited or give up 40.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shinhan Financial Group vs. Biotron Limited
Performance |
Timeline |
Shinhan Financial |
Biotron Limited |
Shinhan Financial and Biotron Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinhan Financial and Biotron
The main advantage of trading using opposite Shinhan Financial and Biotron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Biotron 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 Biotron will offset losses from the drop in Biotron's long position.Shinhan Financial vs. Affinity Bancshares | Shinhan Financial vs. Southern California Bancorp | Shinhan Financial vs. Auburn National Bancorporation | Shinhan Financial vs. BayCom Corp |
Biotron vs. Living Cell Technologies | Biotron vs. Multicell Techs | Biotron vs. Institute of Biomedical | Biotron vs. Health Sciences Gr |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |