Correlation Between Hana Financial and Automobile
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Automobile 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 Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Automobile Pc, you can compare the effects of market volatilities on Hana Financial and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Automobile.
Diversification Opportunities for Hana Financial and Automobile
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Automobile is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Hana Financial i.e., Hana Financial and Automobile go up and down completely randomly.
Pair Corralation between Hana Financial and Automobile
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.67 times more return on investment than Automobile. However, Hana Financial is 1.48 times less risky than Automobile. It trades about 0.02 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.09 per unit of risk. If you would invest 5,734,824 in Hana Financial on October 13, 2024 and sell it today you would earn a total of 125,176 from holding Hana Financial or generate 2.18% 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. Automobile Pc
Performance |
| Timeline |
| Hana Financial |
| Automobile Pc |
Hana Financial and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Automobile
The main advantage of trading using opposite Hana Financial and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Hana Financial vs. Woori Financial Group | Hana Financial vs. Samsung Electronics Co | Hana Financial vs. Samsung Electronics Co | Hana Financial vs. Samsung Life |
| Automobile vs. Incar Financial Service | Automobile vs. Hana Financial | Automobile vs. Hana Materials | Automobile vs. Jeju Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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