Correlation Between Hanwha Aerospace and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both Hanwha Aerospace and INFINITT Healthcare 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 INFINITT Healthcare 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 INFINITT Healthcare Co, you can compare the effects of market volatilities on Hanwha Aerospace and INFINITT Healthcare 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 INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Aerospace and INFINITT Healthcare.
Diversification Opportunities for Hanwha Aerospace and INFINITT Healthcare
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanwha and INFINITT is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Aerospace Co and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare 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 INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of Hanwha Aerospace i.e., Hanwha Aerospace and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between Hanwha Aerospace and INFINITT Healthcare
Assuming the 90 days trading horizon Hanwha Aerospace is expected to generate 1.13 times less return on investment than INFINITT Healthcare. In addition to that, Hanwha Aerospace is 2.32 times more volatile than INFINITT Healthcare Co. It trades about 0.01 of its total potential returns per unit of risk. INFINITT Healthcare Co is currently generating about 0.02 per unit of volatility. If you would invest 444,500 in INFINITT Healthcare Co on September 3, 2024 and sell it today you would earn a total of 5,500 from holding INFINITT Healthcare Co or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Aerospace Co vs. INFINITT Healthcare Co
Performance |
| Timeline |
| Hanwha Aerospace |
| INFINITT Healthcare |
Hanwha Aerospace and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Aerospace and INFINITT Healthcare
The main advantage of trading using opposite Hanwha Aerospace and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Aerospace position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| Hanwha Aerospace vs. INFINITT Healthcare Co | Hanwha Aerospace vs. Atinum Investment Co | Hanwha Aerospace vs. CKH Food Health | Hanwha Aerospace vs. SV Investment |
| INFINITT Healthcare vs. AptaBio Therapeutics | INFINITT Healthcare vs. KT Hitel | INFINITT Healthcare vs. SillaJen | INFINITT Healthcare vs. Cytogen |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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