Correlation Between Hanwha InvestmentSecuri and SHINWON STRUCTION
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and SHINWON STRUCTION 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 Hanwha InvestmentSecuri and SHINWON STRUCTION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha InvestmentSecurities Co and SHINWON STRUCTION COMPANY, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and SHINWON STRUCTION 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 Hanwha InvestmentSecuri with a short position of SHINWON STRUCTION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and SHINWON STRUCTION.
Diversification Opportunities for Hanwha InvestmentSecuri and SHINWON STRUCTION
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and SHINWON is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and SHINWON STRUCTION COMPANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINWON STRUCTION PANY and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co are associated (or correlated) with SHINWON STRUCTION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINWON STRUCTION PANY has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and SHINWON STRUCTION go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and SHINWON STRUCTION
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 0.88 times more return on investment than SHINWON STRUCTION. However, Hanwha InvestmentSecurities Co is 1.14 times less risky than SHINWON STRUCTION. It trades about 0.24 of its potential returns per unit of risk. SHINWON STRUCTION COMPANY is currently generating about 0.05 per unit of risk. If you would invest 349,500 in Hanwha InvestmentSecurities Co on October 23, 2024 and sell it today you would earn a total of 28,000 from holding Hanwha InvestmentSecurities Co or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. SHINWON STRUCTION COMPANY
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| SHINWON STRUCTION PANY |
Hanwha InvestmentSecuri and SHINWON STRUCTION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and SHINWON STRUCTION
The main advantage of trading using opposite Hanwha InvestmentSecuri and SHINWON STRUCTION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri position performs unexpectedly, SHINWON STRUCTION 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 SHINWON STRUCTION will offset losses from the drop in SHINWON STRUCTION's long position.The idea behind Hanwha InvestmentSecurities Co and SHINWON STRUCTION COMPANY 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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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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