Correlation Between Hanwha Solutions and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Daehan Steel 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 Daehan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Daehan Steel, you can compare the effects of market volatilities on Hanwha Solutions and Daehan Steel 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 Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Daehan Steel.
Diversification Opportunities for Hanwha Solutions and Daehan Steel
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanwha and Daehan is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel 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 Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Daehan Steel go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Daehan Steel
Assuming the 90 days trading horizon Hanwha Solutions is expected to under-perform the Daehan Steel. In addition to that, Hanwha Solutions is 1.68 times more volatile than Daehan Steel. It trades about -0.15 of its total potential returns per unit of risk. Daehan Steel is currently generating about 0.08 per unit of volatility. If you would invest 1,291,000 in Daehan Steel on August 25, 2024 and sell it today you would earn a total of 227,000 from holding Daehan Steel or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. Daehan Steel
Performance |
| Timeline |
| Hanwha Solutions |
| Daehan Steel |
Hanwha Solutions and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and Daehan Steel
The main advantage of trading using opposite Hanwha Solutions and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Daehan Steel 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 Daehan Steel will offset losses from the drop in Daehan Steel's long position.| Hanwha Solutions vs. LG Chemicals | Hanwha Solutions vs. POSCO Holdings | Hanwha Solutions vs. Lotte Chemical Corp | Hanwha Solutions vs. Hyundai Steel |
| Daehan Steel vs. Sungchang Autotech Co | Daehan Steel vs. Nh Investment And | Daehan Steel vs. Lion Chemtech Co | Daehan Steel vs. EBEST Investment Securities |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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