Correlation Between Busan Ind and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Busan Ind and Hanwha InvestmentSecuri 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 Busan Ind and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Busan Ind and Hanwha InvestmentSecuri 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 Busan Ind with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Hanwha InvestmentSecuri.
Diversification Opportunities for Busan Ind and Hanwha InvestmentSecuri
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Busan and Hanwha is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Busan Ind 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 Busan Ind are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Busan Ind i.e., Busan Ind and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Busan Ind and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Busan Ind is expected to generate 1.12 times less return on investment than Hanwha InvestmentSecuri. But when comparing it to its historical volatility, Busan Ind is 1.38 times less risky than Hanwha InvestmentSecuri. It trades about 0.08 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 688,000 in Hanwha InvestmentSecurities Co on August 29, 2024 and sell it today you would earn a total of 42,000 from holding Hanwha InvestmentSecurities Co or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Busan Ind |
| Hanwha InvestmentSecuri |
Busan Ind and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Hanwha InvestmentSecuri
The main advantage of trading using opposite Busan Ind and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Busan Ind vs. PJ Metal Co | Busan Ind vs. Lotte Chilsung Beverage | Busan Ind vs. Sempio Foods Co | Busan Ind vs. Korean Reinsurance Co |
| Hanwha InvestmentSecuri vs. Nh Investment And | Hanwha InvestmentSecuri vs. DSC Investment | Hanwha InvestmentSecuri vs. Busan Industrial Co | Hanwha InvestmentSecuri vs. Busan Ind |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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