Correlation Between Hana Financial and Kg Chemical
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Kg Chemical 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 Kg Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Kg Chemical, you can compare the effects of market volatilities on Hana Financial and Kg Chemical 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 Kg Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Kg Chemical.
Diversification Opportunities for Hana Financial and Kg Chemical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hana and 001390 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Kg Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kg Chemical 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 Kg Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kg Chemical has no effect on the direction of Hana Financial i.e., Hana Financial and Kg Chemical go up and down completely randomly.
Pair Corralation between Hana Financial and Kg Chemical
Assuming the 90 days trading horizon Hana Financial is expected to generate 8.58 times less return on investment than Kg Chemical. In addition to that, Hana Financial is 1.33 times more volatile than Kg Chemical. It trades about 0.03 of its total potential returns per unit of risk. Kg Chemical is currently generating about 0.39 per unit of volatility. If you would invest 346,735 in Kg Chemical on October 11, 2024 and sell it today you would earn a total of 37,265 from holding Kg Chemical or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hana Financial vs. Kg Chemical
Performance |
| Timeline |
| Hana Financial |
| Kg Chemical |
Hana Financial and Kg Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Kg Chemical
The main advantage of trading using opposite Hana Financial and Kg Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Kg Chemical 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 Kg Chemical will offset losses from the drop in Kg Chemical's long position.| Hana Financial vs. PI Advanced Materials | Hana Financial vs. Seohee Construction Co | Hana Financial vs. INNOX Advanced Materials | Hana Financial vs. Woorim Machinery Co |
| Kg Chemical vs. INNOX Advanced Materials | Kg Chemical vs. Sempio Foods Co | Kg Chemical vs. RF Materials Co | Kg Chemical vs. Ssangyong Materials Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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