Correlation Between Hana Financial and MetaLabs
Can any of the company-specific risk be diversified away by investing in both Hana Financial and MetaLabs 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 MetaLabs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and MetaLabs Co, you can compare the effects of market volatilities on Hana Financial and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and MetaLabs.
Diversification Opportunities for Hana Financial and MetaLabs
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and MetaLabs is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Hana Financial i.e., Hana Financial and MetaLabs go up and down completely randomly.
Pair Corralation between Hana Financial and MetaLabs
Assuming the 90 days trading horizon Hana Financial is expected to under-perform the MetaLabs. But the stock apears to be less risky and, when comparing its historical volatility, Hana Financial is 1.92 times less risky than MetaLabs. The stock trades about -0.21 of its potential returns per unit of risk. The MetaLabs Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 132,000 in MetaLabs Co on October 23, 2024 and sell it today you would earn a total of 4,300 from holding MetaLabs Co or generate 3.26% 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. MetaLabs Co
Performance |
| Timeline |
| Hana Financial |
| MetaLabs |
Hana Financial and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and MetaLabs
The main advantage of trading using opposite Hana Financial and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| Hana Financial vs. Nature and Environment | Hana Financial vs. BooKook Steel Co | Hana Financial vs. CJ Seafood Corp | Hana Financial vs. Daehan Steel |
| MetaLabs vs. KB Financial Group | MetaLabs vs. Shinhan Financial Group | MetaLabs vs. Hana Financial | MetaLabs 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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