Correlation Between Jeju Bank and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Jeju Bank 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 Jeju Bank and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Jeju Bank 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 Jeju Bank with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Hanwha InvestmentSecuri.
Diversification Opportunities for Jeju Bank and Hanwha InvestmentSecuri
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeju and Hanwha is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Jeju Bank 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 Jeju Bank 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 Jeju Bank i.e., Jeju Bank and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Jeju Bank and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Bank is 5.22 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.16 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 710,000 in Hanwha InvestmentSecurities Co on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Hanwha InvestmentSecurities Co or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Jeju Bank |
| Hanwha InvestmentSecuri |
Jeju Bank and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Hanwha InvestmentSecuri
The main advantage of trading using opposite Jeju Bank and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank 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.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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