Correlation Between Hanwha InvestmentSecuri and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and Lindeman Asia 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 Lindeman Asia 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 Lindeman Asia Investment, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and Lindeman Asia 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 Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and Lindeman Asia.
Diversification Opportunities for Hanwha InvestmentSecuri and Lindeman Asia
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and Lindeman is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment 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 Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and Lindeman Asia go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and Lindeman Asia
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 1.06 times more return on investment than Lindeman Asia. However, Hanwha InvestmentSecuri is 1.06 times more volatile than Lindeman Asia Investment. It trades about 0.02 of its potential returns per unit of risk. Lindeman Asia Investment is currently generating about 0.02 per unit of risk. If you would invest 720,000 in Hanwha InvestmentSecurities Co on October 23, 2024 and sell it today you would lose (25,000) from holding Hanwha InvestmentSecurities Co or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. Lindeman Asia Investment
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| Lindeman Asia Investment |
Hanwha InvestmentSecuri and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and Lindeman Asia
The main advantage of trading using opposite Hanwha InvestmentSecuri and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| Hanwha InvestmentSecuri vs. Daewon Media Co | Hanwha InvestmentSecuri vs. Golden Bridge Investment | Hanwha InvestmentSecuri vs. SAMG Entertainment Co | Hanwha InvestmentSecuri vs. ChipsMedia |
| Lindeman Asia vs. Industrial Bank | Lindeman Asia vs. Nice Information Telecommunication | Lindeman Asia vs. Jeong Moon Information | Lindeman Asia vs. DataSolution |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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