Correlation Between Hanwha Aerospace and Korea Real
Can any of the company-specific risk be diversified away by investing in both Hanwha Aerospace and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Hanwha Aerospace and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Aerospace and Korea Real.
Diversification Opportunities for Hanwha Aerospace and Korea Real
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and Korea is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Aerospace Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Hanwha Aerospace i.e., Hanwha Aerospace and Korea Real go up and down completely randomly.
Pair Corralation between Hanwha Aerospace and Korea Real
Assuming the 90 days trading horizon Hanwha Aerospace Co is expected to under-perform the Korea Real. In addition to that, Hanwha Aerospace is 5.44 times more volatile than Korea Real Estate. It trades about -0.06 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.23 per unit of volatility. If you would invest 103,900 in Korea Real Estate on August 24, 2024 and sell it today you would lose (2,800) from holding Korea Real Estate or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Aerospace Co vs. Korea Real Estate
Performance |
| Timeline |
| Hanwha Aerospace |
| Korea Real Estate |
Hanwha Aerospace and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Aerospace and Korea Real
The main advantage of trading using opposite Hanwha Aerospace and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Aerospace position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real'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 |
| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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