Correlation Between Hanwha Solutions and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Dongwon System 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 Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Dongwon System, you can compare the effects of market volatilities on Hanwha Solutions and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Dongwon System.
Diversification Opportunities for Hanwha Solutions and Dongwon System
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanwha and Dongwon is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Dongwon System go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Dongwon System
Assuming the 90 days trading horizon Hanwha Solutions is expected to generate 1.02 times less return on investment than Dongwon System. In addition to that, Hanwha Solutions is 1.07 times more volatile than Dongwon System. It trades about 0.1 of its total potential returns per unit of risk. Dongwon System is currently generating about 0.11 per unit of volatility. If you would invest 3,795,000 in Dongwon System on November 27, 2024 and sell it today you would earn a total of 175,000 from holding Dongwon System or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. Dongwon System
Performance |
| Timeline |
| Hanwha Solutions |
| Dongwon System |
Hanwha Solutions and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and Dongwon System
The main advantage of trading using opposite Hanwha Solutions and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Hanwha Solutions vs. Orbitech Co | Hanwha Solutions vs. Inzi Display CoLtd | Hanwha Solutions vs. RFTech Co | Hanwha Solutions vs. LG Display Co |
| Dongwon System vs. DB Financial Investment | Dongwon System vs. KakaoBank Corp | Dongwon System vs. Shinhan Inverse Silver | Dongwon System vs. DoubleU Games 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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