Correlation Between Hanwha Life and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Shinsegae Engineering 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 Shinsegae Engineering 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 Shinsegae Engineering Construction, you can compare the effects of market volatilities on Hanwha Life and Shinsegae Engineering 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 Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Shinsegae Engineering.
Diversification Opportunities for Hanwha Life and Shinsegae Engineering
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanwha and Shinsegae is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering 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 Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Hanwha Life i.e., Hanwha Life and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Hanwha Life and Shinsegae Engineering
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to under-perform the Shinsegae Engineering. In addition to that, Hanwha Life is 27.68 times more volatile than Shinsegae Engineering Construction. It trades about -0.14 of its total potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.04 per unit of volatility. If you would invest 1,810,000 in Shinsegae Engineering Construction on October 11, 2024 and sell it today you would earn a total of 2,000 from holding Shinsegae Engineering Construction or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Hanwha Life Insurance |
| Shinsegae Engineering |
Hanwha Life and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Shinsegae Engineering
The main advantage of trading using opposite Hanwha Life and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Shinsegae Engineering 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 Shinsegae Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Hanwha Life vs. Sungdo Engineering Construction | Hanwha Life vs. Seoam Machinery Industry | Hanwha Life vs. Genie Music | Hanwha Life vs. Dongwoo Farm To |
| Shinsegae Engineering vs. Samsung Life Insurance | Shinsegae Engineering vs. RF Materials Co | Shinsegae Engineering vs. Kolon Plastics | Shinsegae Engineering vs. Hanwha Life Insurance |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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