Correlation Between Jeju Bank and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Hanwha Life 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 Life 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 Life Insurance, you can compare the effects of market volatilities on Jeju Bank and Hanwha Life 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 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Hanwha Life.
Diversification Opportunities for Jeju Bank and Hanwha Life
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jeju and Hanwha is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Jeju Bank i.e., Jeju Bank and Hanwha Life go up and down completely randomly.
Pair Corralation between Jeju Bank and Hanwha Life
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the Hanwha Life. In addition to that, Jeju Bank is 1.88 times more volatile than Hanwha Life Insurance. It trades about -0.01 of its total potential returns per unit of risk. Hanwha Life Insurance is currently generating about 0.01 per unit of volatility. If you would invest 246,590 in Hanwha Life Insurance on October 25, 2024 and sell it today you would earn a total of 2,410 from holding Hanwha Life Insurance or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Hanwha Life Insurance
Performance |
| Timeline |
| Jeju Bank |
| Hanwha Life Insurance |
Jeju Bank and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Hanwha Life
The main advantage of trading using opposite Jeju Bank and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Hanwha Life 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 Life will offset losses from the drop in Hanwha Life's long position.| Jeju Bank vs. KB Financial Group | Jeju Bank vs. Shinhan Financial Group | Jeju Bank vs. Hana Financial | Jeju Bank vs. Woori Financial Group |
| Hanwha Life vs. Hanshin Construction Co | Hanwha Life vs. Lotte Non Life Insurance | Hanwha Life vs. Shinsegae Engineering Construction | Hanwha Life vs. Wireless Power Amplifier |
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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