Correlation Between Hanwha Aerospace and Daou Data
Can any of the company-specific risk be diversified away by investing in both Hanwha Aerospace and Daou Data 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 Aerospace and Daou Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Aerospace Co and Daou Data Corp, you can compare the effects of market volatilities on Hanwha Aerospace and Daou Data 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 Aerospace with a short position of Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Aerospace and Daou Data.
Diversification Opportunities for Hanwha Aerospace and Daou Data
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanwha and Daou is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Aerospace Co and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp and Hanwha Aerospace 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 Aerospace Co are associated (or correlated) with Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Hanwha Aerospace i.e., Hanwha Aerospace and Daou Data go up and down completely randomly.
Pair Corralation between Hanwha Aerospace and Daou Data
Assuming the 90 days trading horizon Hanwha Aerospace Co is expected to under-perform the Daou Data. In addition to that, Hanwha Aerospace is 3.82 times more volatile than Daou Data Corp. It trades about -0.15 of its total potential returns per unit of risk. Daou Data Corp is currently generating about -0.05 per unit of volatility. If you would invest 1,095,000 in Daou Data Corp on September 1, 2024 and sell it today you would lose (14,000) from holding Daou Data Corp or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanwha Aerospace Co vs. Daou Data Corp
Performance |
| Timeline |
| Hanwha Aerospace |
| Daou Data Corp |
Hanwha Aerospace and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Aerospace and Daou Data
The main advantage of trading using opposite Hanwha Aerospace and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Aerospace position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Hanwha Aerospace vs. Shinhan Inverse Silver | Hanwha Aerospace vs. Namhae Chemical | Hanwha Aerospace vs. Taegu Broadcasting | Hanwha Aerospace vs. System and Application |
| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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