Correlation Between Dong A and Hana Technology
Can any of the company-specific risk be diversified away by investing in both Dong A and Hana Technology 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 Dong A and Hana Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Steel Technology and Hana Technology Co, you can compare the effects of market volatilities on Dong A and Hana Technology 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 Dong A with a short position of Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Hana Technology.
Diversification Opportunities for Dong A and Hana Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and Hana is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology and Dong A 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 Dong A Steel Technology are associated (or correlated) with Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of Dong A i.e., Dong A and Hana Technology go up and down completely randomly.
Pair Corralation between Dong A and Hana Technology
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.69 times more return on investment than Hana Technology. However, Dong A Steel Technology is 1.45 times less risky than Hana Technology. It trades about -0.02 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.04 per unit of risk. If you would invest 527,000 in Dong A Steel Technology on August 28, 2024 and sell it today you would lose (175,500) from holding Dong A Steel Technology or give up 33.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Hana Technology Co
Performance |
| Timeline |
| Dong A Steel |
| Hana Technology |
Dong A and Hana Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Hana Technology
The main advantage of trading using opposite Dong A and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Hana Technology 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 Technology will offset losses from the drop in Hana Technology's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| Hana Technology vs. Rainbow Robotics | Hana Technology vs. CS BEARING CoLtd | Hana Technology vs. HS Valve 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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