Correlation Between Wonbang Tech and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech 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 Wonbang Tech and Hanwha Life 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 Life Insurance, you can compare the effects of market volatilities on Wonbang Tech 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 Wonbang Tech with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Hanwha Life.
Diversification Opportunities for Wonbang Tech and Hanwha Life
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wonbang and Hanwha is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co 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 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 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 Wonbang Tech i.e., Wonbang Tech and Hanwha Life go up and down completely randomly.
Pair Corralation between Wonbang Tech and Hanwha Life
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Hanwha Life. In addition to that, Wonbang Tech is 1.91 times more volatile than Hanwha Life Insurance. It trades about -0.03 of its total potential returns per unit of risk. Hanwha Life Insurance is currently generating about 0.0 per unit of volatility. If you would invest 265,000 in Hanwha Life Insurance on October 12, 2024 and sell it today you would lose (13,500) from holding Hanwha Life Insurance or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Hanwha Life Insurance
Performance |
| Timeline |
| Wonbang Tech |
| Hanwha Life Insurance |
Wonbang Tech and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Hanwha Life
The main advantage of trading using opposite Wonbang Tech and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech 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.| Wonbang Tech vs. Automobile Pc | Wonbang Tech vs. Hankukpackage Co | Wonbang Tech vs. V One Tech Co | Wonbang Tech vs. SS TECH |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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