Correlation Between System and Hana Financial
Can any of the company-specific risk be diversified away by investing in both System and Hana Financial 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 System and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Hana Financial, you can compare the effects of market volatilities on System and Hana Financial 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 System with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Hana Financial.
Diversification Opportunities for System and Hana Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between System and Hana is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and System 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 System and Application are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of System i.e., System and Hana Financial go up and down completely randomly.
Pair Corralation between System and Hana Financial
Assuming the 90 days trading horizon System and Application is expected to under-perform the Hana Financial. In addition to that, System is 2.23 times more volatile than Hana Financial. It trades about -0.05 of its total potential returns per unit of risk. Hana Financial is currently generating about 0.26 per unit of volatility. If you would invest 5,780,000 in Hana Financial on November 7, 2024 and sell it today you would earn a total of 370,000 from holding Hana Financial or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
System and Application vs. Hana Financial
Performance |
| Timeline |
| System and Application |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hana Financial |
System and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Hana Financial
The main advantage of trading using opposite System and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Hana Financial 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 Financial will offset losses from the drop in Hana Financial's long position.| System vs. Pan Entertainment Co | System vs. SK Chemicals Co | System vs. Tamul Multimedia Co | System vs. ISU Chemical Co |
| Hana Financial vs. Ilji Technology Co | Hana Financial vs. SK IE Technology | Hana Financial vs. Posco Chemical Co | Hana Financial vs. Puloon Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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