Correlation Between Hanwha Chemical and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Hanwha Chemical and Shinhan WTI 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 Chemical and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Chemical Corp and Shinhan WTI Futures, you can compare the effects of market volatilities on Hanwha Chemical and Shinhan WTI 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 Chemical with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Chemical and Shinhan WTI.
Diversification Opportunities for Hanwha Chemical and Shinhan WTI
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanwha and Shinhan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Chemical Corp and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures and Hanwha Chemical 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 Chemical Corp are associated (or correlated) with Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of Hanwha Chemical i.e., Hanwha Chemical and Shinhan WTI go up and down completely randomly.
Pair Corralation between Hanwha Chemical and Shinhan WTI
Assuming the 90 days trading horizon Hanwha Chemical Corp is expected to under-perform the Shinhan WTI. In addition to that, Hanwha Chemical is 1.8 times more volatile than Shinhan WTI Futures. It trades about -0.04 of its total potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.03 per unit of volatility. If you would invest 636,000 in Shinhan WTI Futures on October 27, 2024 and sell it today you would earn a total of 159,500 from holding Shinhan WTI Futures or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.23% |
| Values | Daily Returns |
Hanwha Chemical Corp vs. Shinhan WTI Futures
Performance |
| Timeline |
| Hanwha Chemical Corp |
| Shinhan WTI Futures |
Hanwha Chemical and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Chemical and Shinhan WTI
The main advantage of trading using opposite Hanwha Chemical and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Chemical position performs unexpectedly, Shinhan WTI 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 Shinhan WTI will offset losses from the drop in Shinhan WTI's long position.| Hanwha Chemical vs. Sejong Telecom | Hanwha Chemical vs. Kisan Telecom Co | Hanwha Chemical vs. Industrial Bank | Hanwha Chemical vs. Lotte Data Communication |
| Shinhan WTI vs. Daou Data Corp | Shinhan WTI vs. Iljin Display | Shinhan WTI vs. Dongbu Insurance Co | Shinhan WTI vs. Playgram 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |