Correlation Between Hanwha Solutions and Home Center
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Home Center 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 Home Center into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Home Center Holdings, you can compare the effects of market volatilities on Hanwha Solutions and Home Center 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 Home Center. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Home Center.
Diversification Opportunities for Hanwha Solutions and Home Center
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanwha and Home is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Home Center Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Center Holdings 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 Home Center. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Center Holdings has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Home Center go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Home Center
Assuming the 90 days trading horizon Hanwha Solutions is expected to under-perform the Home Center. In addition to that, Hanwha Solutions is 1.26 times more volatile than Home Center Holdings. It trades about -0.42 of its total potential returns per unit of risk. Home Center Holdings is currently generating about 0.07 per unit of volatility. If you would invest 76,200 in Home Center Holdings on August 28, 2024 and sell it today you would earn a total of 2,300 from holding Home Center Holdings or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. Home Center Holdings
Performance |
| Timeline |
| Hanwha Solutions |
| Home Center Holdings |
Hanwha Solutions and Home Center Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and Home Center
The main advantage of trading using opposite Hanwha Solutions and Home Center positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Home Center 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 Home Center will offset losses from the drop in Home Center's long position.| Hanwha Solutions vs. LG Chemicals | Hanwha Solutions vs. Lotte Chemical Corp | Hanwha Solutions vs. Hyundai Steel | Hanwha Solutions vs. Seah Steel Corp |
| Home Center vs. LG Chemicals | Home Center vs. Lotte Chemical Corp | Home Center vs. Hyundai Steel | Home Center vs. Seah Steel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |