Correlation Between Hana Financial and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Korea Investment 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 Korea Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Korea Investment Holdings, you can compare the effects of market volatilities on Hana Financial and Korea Investment 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Korea Investment.
Diversification Opportunities for Hana Financial and Korea Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hana and Korea is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Hana Financial i.e., Hana Financial and Korea Investment go up and down completely randomly.
Pair Corralation between Hana Financial and Korea Investment
Assuming the 90 days trading horizon Hana Financial is expected to generate 1.5 times more return on investment than Korea Investment. However, Hana Financial is 1.5 times more volatile than Korea Investment Holdings. It trades about 0.07 of its potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.07 per unit of risk. If you would invest 3,799,668 in Hana Financial on August 31, 2024 and sell it today you would earn a total of 2,440,332 from holding Hana Financial or generate 64.22% 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. Korea Investment Holdings
Performance |
| Timeline |
| Hana Financial |
| Korea Investment Holdings |
Hana Financial and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Korea Investment
The main advantage of trading using opposite Hana Financial and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment'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 |
| Korea Investment vs. AptaBio Therapeutics | Korea Investment vs. Daewoo SBI SPAC | Korea Investment vs. Dream Security co | Korea Investment vs. Microfriend |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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