Correlation Between Wonbang Tech and Hanwha Chemical
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Hanwha Chemical 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 Wonbang Tech and Hanwha Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Hanwha Chemical Corp, you can compare the effects of market volatilities on Wonbang Tech and Hanwha Chemical 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 Wonbang Tech with a short position of Hanwha Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Hanwha Chemical.
Diversification Opportunities for Wonbang Tech and Hanwha Chemical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonbang and Hanwha is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Hanwha Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Chemical Corp and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with Hanwha Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Chemical Corp has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Hanwha Chemical go up and down completely randomly.
Pair Corralation between Wonbang Tech and Hanwha Chemical
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.18 times more return on investment than Hanwha Chemical. However, Wonbang Tech is 1.18 times more volatile than Hanwha Chemical Corp. It trades about 0.03 of its potential returns per unit of risk. Hanwha Chemical Corp is currently generating about -0.04 per unit of risk. If you would invest 1,037,688 in Wonbang Tech Co on November 6, 2024 and sell it today you would earn a total of 287,312 from holding Wonbang Tech Co or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.19% |
| Values | Daily Returns |
Wonbang Tech Co vs. Hanwha Chemical Corp
Performance |
| Timeline |
| Wonbang Tech |
| Hanwha Chemical Corp |
Wonbang Tech and Hanwha Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Hanwha Chemical
The main advantage of trading using opposite Wonbang Tech and Hanwha Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Hanwha Chemical 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 Chemical will offset losses from the drop in Hanwha Chemical's long position.| Wonbang Tech vs. Grand Korea Leisure | Wonbang Tech vs. Hanmi Semiconductor Co | Wonbang Tech vs. ITM Semiconductor Co | Wonbang Tech vs. Alton Sports CoLtd |
| Hanwha Chemical vs. Insun Environment New | Hanwha Chemical vs. Youngsin Metal Industrial | Hanwha Chemical vs. Nature and Environment | Hanwha Chemical vs. Daechang Steel 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |