Correlation Between Hana Financial and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Seoyon Topmetal 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 Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Seoyon Topmetal Co, you can compare the effects of market volatilities on Hana Financial and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Seoyon Topmetal.
Diversification Opportunities for Hana Financial and Seoyon Topmetal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hana and Seoyon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Hana Financial i.e., Hana Financial and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Hana Financial and Seoyon Topmetal
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.68 times more return on investment than Seoyon Topmetal. However, Hana Financial is 1.46 times less risky than Seoyon Topmetal. It trades about 0.06 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about -0.02 per unit of risk. If you would invest 6,260,000 in Hana Financial on August 31, 2024 and sell it today you would earn a total of 130,000 from holding Hana Financial or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Hana Financial |
| Seoyon Topmetal |
Hana Financial and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Seoyon Topmetal
The main advantage of trading using opposite Hana Financial and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Hana Financial vs. Korea Investment Holdings | Hana Financial vs. Lindeman Asia Investment | Hana Financial vs. LG Display Co | Hana Financial vs. Daelim Trading Co |
| Seoyon Topmetal vs. LG Display | Seoyon Topmetal vs. Hyundai Motor | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Hyundai Motor 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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