Correlation Between Hanwha Solutions and GS Retail
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and GS Retail 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 Solutions and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and GS Retail Co, you can compare the effects of market volatilities on Hanwha Solutions and GS Retail 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 Solutions with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and GS Retail.
Diversification Opportunities for Hanwha Solutions and GS Retail
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanwha and 007070 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Hanwha Solutions 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 Solutions are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and GS Retail go up and down completely randomly.
Pair Corralation between Hanwha Solutions and GS Retail
Assuming the 90 days trading horizon Hanwha Solutions is expected to generate 1.68 times more return on investment than GS Retail. However, Hanwha Solutions is 1.68 times more volatile than GS Retail Co. It trades about -0.02 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.1 per unit of risk. If you would invest 2,295,000 in Hanwha Solutions on November 3, 2024 and sell it today you would lose (318,000) from holding Hanwha Solutions or give up 13.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.34% |
| Values | Daily Returns |
Hanwha Solutions vs. GS Retail Co
Performance |
| Timeline |
| Hanwha Solutions |
| GS Retail |
Hanwha Solutions and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and GS Retail
The main advantage of trading using opposite Hanwha Solutions and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Hanwha Solutions vs. Duksan Hi Metal | Hanwha Solutions vs. Insung Information Co | Hanwha Solutions vs. Nice Information Telecommunication | Hanwha Solutions vs. Union Materials Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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