Correlation Between Hanwha Solutions and Poongsan
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Poongsan 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 Poongsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Poongsan, you can compare the effects of market volatilities on Hanwha Solutions and Poongsan 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 Poongsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Poongsan.
Diversification Opportunities for Hanwha Solutions and Poongsan
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanwha and Poongsan is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Poongsan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poongsan 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 Poongsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poongsan has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Poongsan go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Poongsan
Assuming the 90 days trading horizon Hanwha Solutions is expected to under-perform the Poongsan. In addition to that, Hanwha Solutions is 1.13 times more volatile than Poongsan. It trades about -0.13 of its total potential returns per unit of risk. Poongsan is currently generating about -0.02 per unit of volatility. If you would invest 5,820,000 in Poongsan on September 3, 2024 and sell it today you would lose (680,000) from holding Poongsan or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. Poongsan
Performance |
| Timeline |
| Hanwha Solutions |
| Poongsan |
Hanwha Solutions and Poongsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and Poongsan
The main advantage of trading using opposite Hanwha Solutions and Poongsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Poongsan 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 Poongsan will offset losses from the drop in Poongsan's long position.| Hanwha Solutions vs. Myoung Shin Industrial | Hanwha Solutions vs. Infinitt Healthcare Co | Hanwha Solutions vs. Namhwa Industrial Co | Hanwha Solutions vs. PJ Metal Co |
| Poongsan vs. LG Chemicals | Poongsan vs. POSCO Holdings | Poongsan vs. Hanwha Solutions | Poongsan vs. Lotte Chemical 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 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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