Correlation Between Hancom and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Hancom and Daishin Balance 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 Hancom and Daishin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancom Inc and Daishin Balance 1, you can compare the effects of market volatilities on Hancom and Daishin Balance 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 Hancom with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancom and Daishin Balance.
Diversification Opportunities for Hancom and Daishin Balance
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hancom and Daishin is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hancom Inc and Daishin Balance 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance 1 and Hancom 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 Hancom Inc are associated (or correlated) with Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance 1 has no effect on the direction of Hancom i.e., Hancom and Daishin Balance go up and down completely randomly.
Pair Corralation between Hancom and Daishin Balance
Assuming the 90 days trading horizon Hancom Inc is expected to generate 1.56 times more return on investment than Daishin Balance. However, Hancom is 1.56 times more volatile than Daishin Balance 1. It trades about 0.29 of its potential returns per unit of risk. Daishin Balance 1 is currently generating about 0.07 per unit of risk. If you would invest 1,863,000 in Hancom Inc on September 2, 2024 and sell it today you would earn a total of 667,000 from holding Hancom Inc or generate 35.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancom Inc vs. Daishin Balance 1
Performance |
| Timeline |
| Hancom Inc |
| Daishin Balance 1 |
Hancom and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancom and Daishin Balance
The main advantage of trading using opposite Hancom and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancom position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Hancom vs. Dongsin Engineering Construction | Hancom vs. Doosan Fuel Cell | Hancom vs. Daishin Balance 1 | Hancom vs. Total Soft Bank |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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