Correlation Between A Tech and Hana Technology
Can any of the company-specific risk be diversified away by investing in both A Tech 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 A Tech and Hana Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Tech Solution Co and Hana Technology Co, you can compare the effects of market volatilities on A Tech 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 A Tech with a short position of Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of A Tech and Hana Technology.
Diversification Opportunities for A Tech and Hana Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 071670 and Hana is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding A Tech Solution Co and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology and A 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 A Tech Solution Co 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 A Tech i.e., A Tech and Hana Technology go up and down completely randomly.
Pair Corralation between A Tech and Hana Technology
Assuming the 90 days trading horizon A Tech Solution Co is expected to generate 0.64 times more return on investment than Hana Technology. However, A Tech Solution Co is 1.56 times less risky than Hana Technology. It trades about -0.09 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.24 per unit of risk. If you would invest 628,000 in A Tech Solution Co on August 28, 2024 and sell it today you would lose (36,000) from holding A Tech Solution Co or give up 5.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
A Tech Solution Co vs. Hana Technology Co
Performance |
| Timeline |
| A Tech Solution |
| Hana Technology |
A Tech and Hana Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A Tech and Hana Technology
The main advantage of trading using opposite A Tech and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A Tech 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.| A Tech vs. Daedong Metals Co | A Tech vs. Hanjin Transportation Co | A Tech vs. LG Chemicals | A Tech vs. Nable Communications |
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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |