Correlation Between Hana Financial and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Hankook Furniture 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 Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Hankook Furniture Co, you can compare the effects of market volatilities on Hana Financial and Hankook Furniture 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 Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Hankook Furniture.
Diversification Opportunities for Hana Financial and Hankook Furniture
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hana and Hankook is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture 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 Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Hana Financial i.e., Hana Financial and Hankook Furniture go up and down completely randomly.
Pair Corralation between Hana Financial and Hankook Furniture
Assuming the 90 days trading horizon Hana Financial is expected to under-perform the Hankook Furniture. In addition to that, Hana Financial is 1.29 times more volatile than Hankook Furniture Co. It trades about -0.21 of its total potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.25 per unit of volatility. If you would invest 390,137 in Hankook Furniture Co on October 23, 2024 and sell it today you would earn a total of 10,863 from holding Hankook Furniture Co or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Hankook Furniture Co
Performance |
| Timeline |
| Hana Financial |
| Hankook Furniture |
Hana Financial and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Hankook Furniture
The main advantage of trading using opposite Hana Financial and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Hana Financial vs. Nature and Environment | Hana Financial vs. BooKook Steel Co | Hana Financial vs. CJ Seafood Corp | Hana Financial vs. Daehan Steel |
| Hankook Furniture vs. KB Financial Group | Hankook Furniture vs. Shinhan Financial Group | Hankook Furniture vs. Hana Financial | Hankook Furniture vs. Woori Financial Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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