Correlation Between Hana Financial and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Dongbu Insurance 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 Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Dongbu Insurance Co, you can compare the effects of market volatilities on Hana Financial and Dongbu Insurance 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 Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Dongbu Insurance.
Diversification Opportunities for Hana Financial and Dongbu Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Dongbu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance 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 Dongbu Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbu Insurance has no effect on the direction of Hana Financial i.e., Hana Financial and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Hana Financial and Dongbu Insurance
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.3 times more return on investment than Dongbu Insurance. However, Hana Financial is 3.34 times less risky than Dongbu Insurance. It trades about 0.31 of its potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.08 per unit of risk. If you would invest 5,780,000 in Hana Financial on November 6, 2024 and sell it today you would earn a total of 270,000 from holding Hana Financial or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Dongbu Insurance Co
Performance |
| Timeline |
| Hana Financial |
| Dongbu Insurance |
Hana Financial and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Dongbu Insurance
The main advantage of trading using opposite Hana Financial and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Dongbu Insurance 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 Dongbu Insurance will offset losses from the drop in Dongbu Insurance'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 |
| Dongbu Insurance vs. Korea Air Svc | Dongbu Insurance vs. T3 Entertainment Co | Dongbu Insurance vs. Cloud Air CoLtd | Dongbu Insurance vs. Tamul Multimedia 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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