Correlation Between Daewon Media and Hana Financial
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Hana Financial 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 Daewon Media and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewon Media Co and Hana Financial, you can compare the effects of market volatilities on Daewon Media and Hana Financial 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 Daewon Media with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Hana Financial.
Diversification Opportunities for Daewon Media and Hana Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daewon and Hana is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Daewon Media 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 Daewon Media Co are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of Daewon Media i.e., Daewon Media and Hana Financial go up and down completely randomly.
Pair Corralation between Daewon Media and Hana Financial
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 1.11 times more return on investment than Hana Financial. However, Daewon Media is 1.11 times more volatile than Hana Financial. It trades about 0.23 of its potential returns per unit of risk. Hana Financial is currently generating about -0.03 per unit of risk. If you would invest 736,299 in Daewon Media Co on October 17, 2024 and sell it today you would earn a total of 173,701 from holding Daewon Media Co or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Media Co vs. Hana Financial
Performance |
| Timeline |
| Daewon Media |
| Hana Financial |
Daewon Media and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Hana Financial
The main advantage of trading using opposite Daewon Media and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Hana Financial 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 Hana Financial will offset losses from the drop in Hana Financial's long position.| Daewon Media vs. LG Chemicals | Daewon Media vs. Kbi Metal Co | Daewon Media vs. E Investment Development | Daewon Media vs. Korea Investment Holdings |
| Hana Financial vs. Daewon Media Co | Hana Financial vs. T3 Entertainment Co | Hana Financial vs. Lotte Data Communication | Hana Financial vs. GS Retail Co |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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