Correlation Between Hanwha Life and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Kumho Petro 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 Hanwha Life and Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Life Insurance and Kumho Petro Chemical, you can compare the effects of market volatilities on Hanwha Life and Kumho Petro 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 Hanwha Life with a short position of Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Kumho Petro.
Diversification Opportunities for Hanwha Life and Kumho Petro
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanwha and Kumho is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical and Hanwha Life 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 Hanwha Life Insurance are associated (or correlated) with Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Hanwha Life i.e., Hanwha Life and Kumho Petro go up and down completely randomly.
Pair Corralation between Hanwha Life and Kumho Petro
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to under-perform the Kumho Petro. In addition to that, Hanwha Life is 1.12 times more volatile than Kumho Petro Chemical. It trades about -0.06 of its total potential returns per unit of risk. Kumho Petro Chemical is currently generating about -0.05 per unit of volatility. If you would invest 6,550,000 in Kumho Petro Chemical on November 3, 2024 and sell it today you would lose (1,510,000) from holding Kumho Petro Chemical or give up 23.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Kumho Petro Chemical
Performance |
| Timeline |
| Hanwha Life Insurance |
| Kumho Petro Chemical |
Hanwha Life and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Kumho Petro
The main advantage of trading using opposite Hanwha Life and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Hanwha Life vs. AptaBio Therapeutics | Hanwha Life vs. Daewoo SBI SPAC | Hanwha Life vs. Dream Security co | Hanwha Life vs. Microfriend |
| Kumho Petro vs. Alton Sports CoLtd | Kumho Petro vs. Cube Entertainment | Kumho Petro vs. Next Entertainment World | Kumho Petro vs. MEDIANA CoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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