Correlation Between Hana Financial and Hurum
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Hurum 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 Hurum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Hurum Co, you can compare the effects of market volatilities on Hana Financial and Hurum 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 Hurum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Hurum.
Diversification Opportunities for Hana Financial and Hurum
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hana and Hurum is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Hurum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurum 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 Hurum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurum has no effect on the direction of Hana Financial i.e., Hana Financial and Hurum go up and down completely randomly.
Pair Corralation between Hana Financial and Hurum
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.95 times more return on investment than Hurum. However, Hana Financial is 1.05 times less risky than Hurum. It trades about 0.39 of its potential returns per unit of risk. Hurum Co is currently generating about 0.1 per unit of risk. If you would invest 5,680,000 in Hana Financial on November 3, 2024 and sell it today you would earn a total of 370,000 from holding Hana Financial or generate 6.51% 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. Hurum Co
Performance |
| Timeline |
| Hana Financial |
| Hurum |
Hana Financial and Hurum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Hurum
The main advantage of trading using opposite Hana Financial and Hurum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Hurum 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 Hurum will offset losses from the drop in Hurum's long position.| Hana Financial vs. Hanjin Transportation Co | Hana Financial vs. Seoul Food Industrial | Hana Financial vs. Daiyang Metal Co | Hana Financial vs. Industrial Bank |
| Hurum vs. TK Chemical | Hurum vs. Dongnam Chemical Co | Hurum vs. Youngchang Chemical Co | Hurum vs. Nice Information Telecommunication |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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