Correlation Between Hana Financial and Cots Technology
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Cots Technology 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 Cots Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Cots Technology Co, you can compare the effects of market volatilities on Hana Financial and Cots Technology 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 Cots Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Cots Technology.
Diversification Opportunities for Hana Financial and Cots Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hana and Cots is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Cots Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cots Technology 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 Cots Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cots Technology has no effect on the direction of Hana Financial i.e., Hana Financial and Cots Technology go up and down completely randomly.
Pair Corralation between Hana Financial and Cots Technology
Assuming the 90 days trading horizon Hana Financial is expected to generate 1.16 times less return on investment than Cots Technology. But when comparing it to its historical volatility, Hana Financial is 1.85 times less risky than Cots Technology. It trades about 0.07 of its potential returns per unit of risk. Cots Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,337,000 in Cots Technology Co on November 28, 2024 and sell it today you would earn a total of 529,000 from holding Cots Technology Co or generate 39.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Cots Technology Co
Performance |
| Timeline |
| Hana Financial |
| Cots Technology |
Hana Financial and Cots Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Cots Technology
The main advantage of trading using opposite Hana Financial and Cots Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Cots Technology 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 Cots Technology will offset losses from the drop in Cots Technology's long position.| Hana Financial vs. System and Application | Hana Financial vs. Insung Information Co | Hana Financial vs. Daishin Information Communications | Hana Financial vs. Daejung Chemicals Metals |
| Cots Technology vs. Hwangkum Steel Technology | Cots Technology vs. Mobileleader CoLtd | Cots Technology vs. iNtRON Biotechnology | Cots Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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