Correlation Between Hwaseung Industries and Innowireless
Can any of the company-specific risk be diversified away by investing in both Hwaseung Industries and Innowireless 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 Hwaseung Industries and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwaseung Industries Co and Innowireless Co, you can compare the effects of market volatilities on Hwaseung Industries and Innowireless 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 Hwaseung Industries with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwaseung Industries and Innowireless.
Diversification Opportunities for Hwaseung Industries and Innowireless
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwaseung and Innowireless is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hwaseung Industries Co and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and Hwaseung Industries 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 Hwaseung Industries Co are associated (or correlated) with Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Hwaseung Industries i.e., Hwaseung Industries and Innowireless go up and down completely randomly.
Pair Corralation between Hwaseung Industries and Innowireless
Assuming the 90 days trading horizon Hwaseung Industries is expected to generate 1.97 times less return on investment than Innowireless. But when comparing it to its historical volatility, Hwaseung Industries Co is 1.45 times less risky than Innowireless. It trades about 0.17 of its potential returns per unit of risk. Innowireless Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,713,000 in Innowireless Co on September 13, 2024 and sell it today you would earn a total of 237,000 from holding Innowireless Co or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hwaseung Industries Co vs. Innowireless Co
Performance |
| Timeline |
| Hwaseung Industries |
| Innowireless |
Hwaseung Industries and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwaseung Industries and Innowireless
The main advantage of trading using opposite Hwaseung Industries and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwaseung Industries position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Hwaseung Industries vs. SBI Investment KOREA | Hwaseung Industries vs. DB Financial Investment | Hwaseung Industries vs. Echomarketing CoLtd | Hwaseung Industries vs. Hankook Steel Co |
| Innowireless vs. Hanil Iron Steel | Innowireless vs. Coloray International Investment | Innowireless vs. Woori Technology Investment | Innowireless vs. Jeju Beer 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |