Correlation Between Hana Financial and Xavis
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Xavis 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 Xavis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Xavis Co, you can compare the effects of market volatilities on Hana Financial and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Xavis.
Diversification Opportunities for Hana Financial and Xavis
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and Xavis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Hana Financial i.e., Hana Financial and Xavis go up and down completely randomly.
Pair Corralation between Hana Financial and Xavis
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.52 times more return on investment than Xavis. However, Hana Financial is 1.93 times less risky than Xavis. It trades about 0.07 of its potential returns per unit of risk. Xavis Co is currently generating about -0.02 per unit of risk. If you would invest 3,872,915 in Hana Financial on August 29, 2024 and sell it today you would earn a total of 2,337,085 from holding Hana Financial or generate 60.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Xavis Co
Performance |
| Timeline |
| Hana Financial |
| Xavis |
Hana Financial and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Xavis
The main advantage of trading using opposite Hana Financial and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Hana Financial vs. Korea New Network | Hana Financial vs. Dong A Eltek | Hana Financial vs. Dreamus Company | Hana Financial vs. SK Bioscience Co |
| Xavis vs. Korea Information Engineering | Xavis vs. System and Application | Xavis vs. Insung Information Co | Xavis vs. Daishin Information Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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