Correlation Between Hotel Shilla and Hanwha Chemical
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Hanwha Chemical 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 Hotel Shilla and Hanwha Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Hanwha Chemical Corp, you can compare the effects of market volatilities on Hotel Shilla and Hanwha Chemical 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 Hotel Shilla with a short position of Hanwha Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Hanwha Chemical.
Diversification Opportunities for Hotel Shilla and Hanwha Chemical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and Hanwha is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Hanwha Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Chemical Corp and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with Hanwha Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Chemical Corp has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Hanwha Chemical go up and down completely randomly.
Pair Corralation between Hotel Shilla and Hanwha Chemical
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the Hanwha Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Shilla Co is 2.54 times less risky than Hanwha Chemical. The stock trades about -0.11 of its potential returns per unit of risk. The Hanwha Chemical Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,904,232 in Hanwha Chemical Corp on November 7, 2024 and sell it today you would lose (2,904,232) from holding Hanwha Chemical Corp or give up 59.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.19% |
| Values | Daily Returns |
Hotel Shilla Co vs. Hanwha Chemical Corp
Performance |
| Timeline |
| Hotel Shilla |
| Hanwha Chemical Corp |
Hotel Shilla and Hanwha Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Hanwha Chemical
The main advantage of trading using opposite Hotel Shilla and Hanwha Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Hanwha Chemical 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 Chemical will offset losses from the drop in Hanwha Chemical's long position.| Hotel Shilla vs. Bosung Power Technology | Hotel Shilla vs. Eugene Technology CoLtd | Hotel Shilla vs. KG Eco Technology | Hotel Shilla vs. Hwangkum Steel Technology |
| Hanwha Chemical vs. Insun Environment New | Hanwha Chemical vs. Youngsin Metal Industrial | Hanwha Chemical vs. Nature and Environment | Hanwha Chemical vs. Daechang Steel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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