Correlation Between Daekyung Machinery and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Daekyung Machinery 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 Daekyung Machinery and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daekyung Machinery Engineering and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Daekyung Machinery 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 Daekyung Machinery with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daekyung Machinery and Hanwha InvestmentSecuri.
Diversification Opportunities for Daekyung Machinery and Hanwha InvestmentSecuri
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daekyung and Hanwha is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Daekyung Machinery Engineering and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Daekyung Machinery 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 Daekyung Machinery Engineering 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 Daekyung Machinery i.e., Daekyung Machinery and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Daekyung Machinery and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Daekyung Machinery Engineering is expected to generate 0.56 times more return on investment than Hanwha InvestmentSecuri. However, Daekyung Machinery Engineering is 1.77 times less risky than Hanwha InvestmentSecuri. It trades about 0.25 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.07 per unit of risk. If you would invest 39,100 in Daekyung Machinery Engineering on September 3, 2024 and sell it today you would earn a total of 12,400 from holding Daekyung Machinery Engineering or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.68% |
| Values | Daily Returns |
Daekyung Machinery Engineering vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Daekyung Machinery |
| Hanwha InvestmentSecuri |
Daekyung Machinery and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daekyung Machinery and Hanwha InvestmentSecuri
The main advantage of trading using opposite Daekyung Machinery and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daekyung Machinery 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.| Daekyung Machinery vs. Haesung Industrial Co | Daekyung Machinery vs. Polaris Office Corp | Daekyung Machinery vs. Wireless Power Amplifier | Daekyung Machinery vs. Cheryong Industrial CoLtd |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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