Correlation Between Mgame Corp and Hanwha Solutions
Can any of the company-specific risk be diversified away by investing in both Mgame Corp and Hanwha Solutions 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 Mgame Corp and Hanwha Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mgame Corp and Hanwha Solutions, you can compare the effects of market volatilities on Mgame Corp and Hanwha Solutions 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 Mgame Corp with a short position of Hanwha Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mgame Corp and Hanwha Solutions.
Diversification Opportunities for Mgame Corp and Hanwha Solutions
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mgame and Hanwha is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mgame Corp and Hanwha Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Solutions and Mgame Corp 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 Mgame Corp are associated (or correlated) with Hanwha Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Solutions has no effect on the direction of Mgame Corp i.e., Mgame Corp and Hanwha Solutions go up and down completely randomly.
Pair Corralation between Mgame Corp and Hanwha Solutions
Assuming the 90 days trading horizon Mgame Corp is expected to generate 0.69 times more return on investment than Hanwha Solutions. However, Mgame Corp is 1.44 times less risky than Hanwha Solutions. It trades about -0.03 of its potential returns per unit of risk. Hanwha Solutions is currently generating about -0.04 per unit of risk. If you would invest 823,883 in Mgame Corp on November 6, 2024 and sell it today you would lose (309,883) from holding Mgame Corp or give up 37.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.21% |
| Values | Daily Returns |
Mgame Corp vs. Hanwha Solutions
Performance |
| Timeline |
| Mgame Corp |
| Hanwha Solutions |
Mgame Corp and Hanwha Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mgame Corp and Hanwha Solutions
The main advantage of trading using opposite Mgame Corp and Hanwha Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mgame Corp position performs unexpectedly, Hanwha Solutions 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 Solutions will offset losses from the drop in Hanwha Solutions' long position.| Mgame Corp vs. AptaBio Therapeutics | Mgame Corp vs. Daewoo SBI SPAC | Mgame Corp vs. Dream Security co | Mgame Corp vs. Microfriend |
| Hanwha Solutions vs. Woori Technology Investment | Hanwha Solutions vs. FNSTech Co | Hanwha Solutions vs. PNC Technologies co | Hanwha Solutions vs. Dongwoon Anatech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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