Correlation Between Hana Financial and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Miwon Chemicals 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 Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Miwon Chemicals Co, you can compare the effects of market volatilities on Hana Financial and Miwon Chemicals 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 Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Miwon Chemicals.
Diversification Opportunities for Hana Financial and Miwon Chemicals
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hana and Miwon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of Hana Financial i.e., Hana Financial and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Hana Financial and Miwon Chemicals
Assuming the 90 days trading horizon Hana Financial is expected to generate 1.34 times more return on investment than Miwon Chemicals. However, Hana Financial is 1.34 times more volatile than Miwon Chemicals Co. It trades about 0.38 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about -0.06 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Miwon Chemicals Co
Performance |
| Timeline |
| Hana Financial |
| Miwon Chemicals |
Hana Financial and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Miwon Chemicals
The main advantage of trading using opposite Hana Financial and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Miwon Chemicals 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 Miwon Chemicals will offset losses from the drop in Miwon Chemicals' 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 |
| Miwon Chemicals vs. ADTechnology CoLtd | Miwon Chemicals vs. Bosung Power Technology | Miwon Chemicals vs. Jeju Bank | Miwon Chemicals vs. Guyoung Technology Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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