Correlation Between Hana Financial and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Finebesteel 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 Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Finebesteel, you can compare the effects of market volatilities on Hana Financial and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Finebesteel.
Diversification Opportunities for Hana Financial and Finebesteel
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hana and Finebesteel is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Hana Financial i.e., Hana Financial and Finebesteel go up and down completely randomly.
Pair Corralation between Hana Financial and Finebesteel
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.89 times more return on investment than Finebesteel. However, Hana Financial is 1.12 times less risky than Finebesteel. It trades about -0.02 of its potential returns per unit of risk. Finebesteel is currently generating about -0.2 per unit of risk. If you would invest 5,920,000 in Hana Financial on October 12, 2024 and sell it today you would lose (60,000) from holding Hana Financial or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Finebesteel
Performance |
| Timeline |
| Hana Financial |
| Finebesteel |
Hana Financial and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Finebesteel
The main advantage of trading using opposite Hana Financial and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Hana Financial vs. Woori Financial Group | Hana Financial vs. Samsung Electronics Co | Hana Financial vs. Samsung Electronics Co | Hana Financial vs. Samsung Life |
| Finebesteel vs. MediaZen | Finebesteel vs. MEDIANA CoLtd | Finebesteel vs. Hana Financial | Finebesteel vs. Lotte Non Life Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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