Correlation Between Hanwha InvestmentSecuri and Global Standard
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and Global Standard.
Diversification Opportunities for Hanwha InvestmentSecuri and Global Standard
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and Global is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and Global Standard go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and Global Standard
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 2.17 times more return on investment than Global Standard. However, Hanwha InvestmentSecuri is 2.17 times more volatile than Global Standard Technology. It trades about 0.09 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.06 per unit of risk. If you would invest 688,000 in Hanwha InvestmentSecurities Co on August 28, 2024 and sell it today you would earn a total of 67,000 from holding Hanwha InvestmentSecurities Co or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. Global Standard Technology
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| Global Standard Tech |
Hanwha InvestmentSecuri and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and Global Standard
The main advantage of trading using opposite Hanwha InvestmentSecuri and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.The idea behind Hanwha InvestmentSecurities Co and Global Standard Technology 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.| Global Standard vs. Korea Real Estate | Global Standard vs. Korea Ratings Co | Global Standard vs. IQuest Co | Global Standard vs. Wonbang Tech 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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