Correlation Between Hana Financial and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Leaders Technology 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 Leaders Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Leaders Technology Investment, you can compare the effects of market volatilities on Hana Financial and Leaders Technology 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 Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Leaders Technology.
Diversification Opportunities for Hana Financial and Leaders Technology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Leaders is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of Hana Financial i.e., Hana Financial and Leaders Technology go up and down completely randomly.
Pair Corralation between Hana Financial and Leaders Technology
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.56 times more return on investment than Leaders Technology. However, Hana Financial is 1.79 times less risky than Leaders Technology. It trades about -0.05 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about -0.11 per unit of risk. If you would invest 6,380,000 in Hana Financial on October 14, 2024 and sell it today you would lose (520,000) from holding Hana Financial or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Leaders Technology Investment
Performance |
| Timeline |
| Hana Financial |
| Leaders Technology |
Hana Financial and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Leaders Technology
The main advantage of trading using opposite Hana Financial and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| Hana Financial vs. Moadata Co | Hana Financial vs. Lotte Data Communication | Hana Financial vs. Automobile Pc | Hana Financial vs. Sangsangin Investment Securities |
| Leaders Technology vs. Samlip General Foods | Leaders Technology vs. Sam Yang Foods | Leaders Technology vs. Daejung Chemicals Metals | Leaders Technology vs. Sajo Seafood |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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