Correlation Between Hanwha Aerospace and Insung Information
Can any of the company-specific risk be diversified away by investing in both Hanwha Aerospace and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Hanwha Aerospace and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Aerospace and Insung Information.
Diversification Opportunities for Hanwha Aerospace and Insung Information
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanwha and Insung is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Aerospace Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Hanwha Aerospace i.e., Hanwha Aerospace and Insung Information go up and down completely randomly.
Pair Corralation between Hanwha Aerospace and Insung Information
Assuming the 90 days trading horizon Hanwha Aerospace Co is expected to generate 1.1 times more return on investment than Insung Information. However, Hanwha Aerospace is 1.1 times more volatile than Insung Information Co. It trades about -0.06 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.08 per unit of risk. If you would invest 37,300,000 in Hanwha Aerospace Co on August 24, 2024 and sell it today you would lose (1,650,000) from holding Hanwha Aerospace Co or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Aerospace Co vs. Insung Information Co
Performance |
| Timeline |
| Hanwha Aerospace |
| Insung Information |
Hanwha Aerospace and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Aerospace and Insung Information
The main advantage of trading using opposite Hanwha Aerospace and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Aerospace position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Hanwha Aerospace vs. Insung Information Co | Hanwha Aerospace vs. Korea Information Engineering | Hanwha Aerospace vs. Samhwa Paint Industrial | Hanwha Aerospace vs. MetaLabs Co |
| Insung Information vs. Korea Real Estate | Insung Information vs. Korea Ratings Co | Insung Information vs. IQuest Co | Insung Information vs. Wonbang Tech 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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