Correlation Between Wonbang Tech and Hanwha Aerospace
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Hanwha Aerospace 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 Aerospace 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 Aerospace Co, you can compare the effects of market volatilities on Wonbang Tech and Hanwha Aerospace 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 Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Hanwha Aerospace.
Diversification Opportunities for Wonbang Tech and Hanwha Aerospace
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wonbang and Hanwha is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Hanwha Aerospace Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Aerospace 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 Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Aerospace has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Hanwha Aerospace go up and down completely randomly.
Pair Corralation between Wonbang Tech and Hanwha Aerospace
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Hanwha Aerospace. In addition to that, Wonbang Tech is 1.09 times more volatile than Hanwha Aerospace Co. It trades about -0.01 of its total potential returns per unit of risk. Hanwha Aerospace Co is currently generating about 0.12 per unit of volatility. If you would invest 12,681,500 in Hanwha Aerospace Co on September 4, 2024 and sell it today you would earn a total of 19,418,500 from holding Hanwha Aerospace Co or generate 153.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Hanwha Aerospace Co
Performance |
| Timeline |
| Wonbang Tech |
| Hanwha Aerospace |
Wonbang Tech and Hanwha Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Hanwha Aerospace
The main advantage of trading using opposite Wonbang Tech and Hanwha Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Hanwha Aerospace 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 Aerospace will offset losses from the drop in Hanwha Aerospace's long position.| Wonbang Tech vs. Grand Korea Leisure | Wonbang Tech vs. Han Kook Steel | Wonbang Tech vs. Dongbu Steel Co | Wonbang Tech vs. Iljin Display |
| Hanwha Aerospace vs. Sam Yang Foods | Hanwha Aerospace vs. Green Cross Medical | Hanwha Aerospace vs. Shinsegae Food | Hanwha Aerospace vs. ITM Semiconductor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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