Correlation Between Hanwha Solutions and Tplex
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Tplex 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 Tplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Tplex Co, you can compare the effects of market volatilities on Hanwha Solutions and Tplex 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 Tplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Tplex.
Diversification Opportunities for Hanwha Solutions and Tplex
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and Tplex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Tplex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tplex 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 Tplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tplex has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Tplex go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Tplex
Assuming the 90 days trading horizon Hanwha Solutions is expected to generate 1.77 times more return on investment than Tplex. However, Hanwha Solutions is 1.77 times more volatile than Tplex Co. It trades about 0.24 of its potential returns per unit of risk. Tplex Co is currently generating about 0.02 per unit of risk. If you would invest 1,775,000 in Hanwha Solutions on November 9, 2024 and sell it today you would earn a total of 370,000 from holding Hanwha Solutions or generate 20.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. Tplex Co
Performance |
| Timeline |
| Hanwha Solutions |
| Tplex |
Hanwha Solutions and Tplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and Tplex
The main advantage of trading using opposite Hanwha Solutions and Tplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Tplex 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 Tplex will offset losses from the drop in Tplex's long position.| Hanwha Solutions vs. ECSTELECOM Co | Hanwha Solutions vs. Korea Information Communications | Hanwha Solutions vs. Seoul Electronics Telecom | Hanwha Solutions vs. SK Chemicals Co |
| Tplex vs. Ssangyong Information Communication | Tplex vs. Nable Communications | Tplex vs. Nice Information Telecommunication | Tplex vs. Innowireless 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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