Correlation Between Kiwoom and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Kiwoom and Hanwha Life 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 Kiwoom and Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiwoom and Hanwha Life Insurance, you can compare the effects of market volatilities on Kiwoom and Hanwha Life 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 Kiwoom with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiwoom and Hanwha Life.
Diversification Opportunities for Kiwoom and Hanwha Life
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kiwoom and Hanwha is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kiwoom and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance and Kiwoom 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 Kiwoom are associated (or correlated) with Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Kiwoom i.e., Kiwoom and Hanwha Life go up and down completely randomly.
Pair Corralation between Kiwoom and Hanwha Life
Assuming the 90 days trading horizon Kiwoom is expected to generate 2.22 times more return on investment than Hanwha Life. However, Kiwoom is 2.22 times more volatile than Hanwha Life Insurance. It trades about 0.06 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.06 per unit of risk. If you would invest 11,970,500 in Kiwoom on October 23, 2024 and sell it today you would earn a total of 229,500 from holding Kiwoom or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kiwoom vs. Hanwha Life Insurance
Performance |
| Timeline |
| Kiwoom |
| Hanwha Life Insurance |
Kiwoom and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiwoom and Hanwha Life
The main advantage of trading using opposite Kiwoom and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiwoom position performs unexpectedly, Hanwha Life 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 Life will offset losses from the drop in Hanwha Life's long position.| Kiwoom vs. Hanwha Life Insurance | Kiwoom vs. Korean Drug Co | Kiwoom vs. Jin Air Co | Kiwoom vs. SK Chemicals Co |
| Hanwha Life vs. Samsung Life Insurance | Hanwha Life vs. Sam Yang Foods | Hanwha Life vs. Sajo Seafood | Hanwha Life vs. Shinhan Financial Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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