Correlation Between Hana Financial and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Shinsegae Engineering 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 Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Hana Financial and Shinsegae Engineering 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 Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Shinsegae Engineering.
Diversification Opportunities for Hana Financial and Shinsegae Engineering
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hana and Shinsegae is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering 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 Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Hana Financial i.e., Hana Financial and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Hana Financial and Shinsegae Engineering
Assuming the 90 days trading horizon Hana Financial is expected to generate 13.63 times more return on investment than Shinsegae Engineering. However, Hana Financial is 13.63 times more volatile than Shinsegae Engineering Construction. It trades about 0.3 of its potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.27 per unit of risk. If you would invest 5,680,000 in Hana Financial on November 1, 2024 and sell it today you would earn a total of 240,000 from holding Hana Financial or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Hana Financial |
| Shinsegae Engineering |
Hana Financial and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Shinsegae Engineering
The main advantage of trading using opposite Hana Financial and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Shinsegae Engineering 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 Shinsegae Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Hana Financial vs. INSUN Environmental New | Hana Financial vs. Korea Steel Co | Hana Financial vs. Grand Korea Leisure | Hana Financial vs. Husteel |
| Shinsegae Engineering vs. KB Financial Group | Shinsegae Engineering vs. Shinhan Financial Group | Shinsegae Engineering vs. Hana Financial | Shinsegae Engineering 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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