Correlation Between Hanwha Life and Automobile
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Hanwha Life and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Automobile.
Diversification Opportunities for Hanwha Life and Automobile
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanwha and Automobile is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Hanwha Life i.e., Hanwha Life and Automobile go up and down completely randomly.
Pair Corralation between Hanwha Life and Automobile
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to generate 0.32 times more return on investment than Automobile. However, Hanwha Life Insurance is 3.08 times less risky than Automobile. It trades about 0.15 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.16 per unit of risk. If you would invest 244,500 in Hanwha Life Insurance on November 3, 2024 and sell it today you would earn a total of 5,000 from holding Hanwha Life Insurance or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Automobile Pc
Performance |
| Timeline |
| Hanwha Life Insurance |
| Automobile Pc |
Hanwha Life and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Automobile
The main advantage of trading using opposite Hanwha Life and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Hanwha Life vs. AptaBio Therapeutics | Hanwha Life vs. Daewoo SBI SPAC | Hanwha Life vs. Dream Security co | Hanwha Life vs. Microfriend |
| Automobile vs. Duksan Hi Metal | Automobile vs. Daejung Chemicals Metals | Automobile vs. iNtRON Biotechnology | Automobile vs. Eagon Industrial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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