Correlation Between Hana Financial and Korea Industrial
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Korea Industrial 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 Korea Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Korea Industrial Co, you can compare the effects of market volatilities on Hana Financial and Korea Industrial 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 Korea Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Korea Industrial.
Diversification Opportunities for Hana Financial and Korea Industrial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hana and Korea is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Korea Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea 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 Korea Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Industrial has no effect on the direction of Hana Financial i.e., Hana Financial and Korea Industrial go up and down completely randomly.
Pair Corralation between Hana Financial and Korea Industrial
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.7 times more return on investment than Korea Industrial. However, Hana Financial is 1.43 times less risky than Korea Industrial. It trades about 0.04 of its potential returns per unit of risk. Korea Industrial Co is currently generating about 0.01 per unit of risk. If you would invest 5,229,775 in Hana Financial on November 8, 2024 and sell it today you would earn a total of 910,225 from holding Hana Financial or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Korea Industrial Co
Performance |
| Timeline |
| Hana Financial |
| Korea Industrial |
Hana Financial and Korea Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Korea Industrial
The main advantage of trading using opposite Hana Financial and Korea Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Korea Industrial 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 Korea Industrial will offset losses from the drop in Korea Industrial's long position.| Hana Financial vs. Sempio Foods Co | Hana Financial vs. DONGKUK TED METAL | Hana Financial vs. Hanjoo Light Metal | Hana Financial vs. Hannong Chemicals |
| Korea Industrial vs. Echomarketing CoLtd | Korea Industrial vs. Chorokbaem Healthcare Co | Korea Industrial vs. Dongbang Transport Logistics | Korea Industrial vs. Mobileleader CoLtd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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