Correlation Between Sung Bo and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Hanwha InvestmentSecuri 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 Sung Bo and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Sung Bo and Hanwha InvestmentSecuri 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 Sung Bo with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Hanwha InvestmentSecuri.
Diversification Opportunities for Sung Bo and Hanwha InvestmentSecuri
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sung and Hanwha is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Sung Bo i.e., Sung Bo and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Sung Bo and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 3.22 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.04 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 500,000 in Hanwha InvestmentSecurities Co on August 31, 2024 and sell it today you would earn a total of 212,000 from holding Hanwha InvestmentSecurities Co or generate 42.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| Hanwha InvestmentSecuri |
Sung Bo and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Hanwha InvestmentSecuri
The main advantage of trading using opposite Sung Bo and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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