Correlation Between Hana Financial and Daesung Industrial
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Daesung Industrial 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 Daesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Daesung Industrial Co, you can compare the effects of market volatilities on Hana Financial and Daesung Industrial 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 Daesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Daesung Industrial.
Diversification Opportunities for Hana Financial and Daesung Industrial
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hana and Daesung is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Daesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Industrial 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 Daesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Industrial has no effect on the direction of Hana Financial i.e., Hana Financial and Daesung Industrial go up and down completely randomly.
Pair Corralation between Hana Financial and Daesung Industrial
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.6 times more return on investment than Daesung Industrial. However, Hana Financial is 1.68 times less risky than Daesung Industrial. It trades about 0.38 of its potential returns per unit of risk. Daesung Industrial Co is currently generating about -0.12 per unit of risk. If you would invest 5,700,000 in Hana Financial on November 4, 2024 and sell it today you would earn a total of 350,000 from holding Hana Financial or generate 6.14% 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. Daesung Industrial Co
Performance |
| Timeline |
| Hana Financial |
| Daesung Industrial |
Hana Financial and Daesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Daesung Industrial
The main advantage of trading using opposite Hana Financial and Daesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Daesung Industrial 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 Daesung Industrial will offset losses from the drop in Daesung Industrial's long position.| Hana Financial vs. Barunson Entertainment Arts | Hana Financial vs. Polaris Office Corp | Hana Financial vs. Golden Bridge Investment | Hana Financial vs. Hyundai Home Shopping |
| Daesung Industrial vs. Stic Investments | Daesung Industrial vs. LB Investment | Daesung Industrial vs. SBI Investment KOREA | Daesung Industrial vs. Golden Bridge Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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