Correlation Between Hana Financial and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Samhwa Paint 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 Hana Financial and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Samhwa Paint Industrial, you can compare the effects of market volatilities on Hana Financial and Samhwa Paint 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 Hana Financial with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Samhwa Paint.
Diversification Opportunities for Hana Financial and Samhwa Paint
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Samhwa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Hana Financial 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 Hana Financial are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Hana Financial i.e., Hana Financial and Samhwa Paint go up and down completely randomly.
Pair Corralation between Hana Financial and Samhwa Paint
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.9 times more return on investment than Samhwa Paint. However, Hana Financial is 1.11 times less risky than Samhwa Paint. It trades about -0.01 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.14 per unit of risk. If you would invest 6,190,000 in Hana Financial on November 6, 2024 and sell it today you would lose (140,000) from holding Hana Financial or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Hana Financial vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Hana Financial |
| Samhwa Paint Industrial |
Hana Financial and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Samhwa Paint
The main advantage of trading using opposite Hana Financial and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Hana Financial vs. Sangsin Energy Display | Hana Financial vs. Kukdong Oil Chemicals | Hana Financial vs. Hanwha Chemical Corp | Hana Financial vs. Echomarketing CoLtd |
| Samhwa Paint vs. Hankukpackage Co | Samhwa Paint vs. Lotte Non Life Insurance | Samhwa Paint vs. Shinhan Inverse Silver | Samhwa Paint vs. Korean Reinsurance 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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