Correlation Between Hanwha Life and Nice Information
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on Hanwha Life and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Nice Information.
Diversification Opportunities for Hanwha Life and Nice Information
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanwha and Nice is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of Hanwha Life i.e., Hanwha Life and Nice Information go up and down completely randomly.
Pair Corralation between Hanwha Life and Nice Information
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to generate 1.01 times more return on investment than Nice Information. However, Hanwha Life is 1.01 times more volatile than Nice Information Telecommunication. It trades about -0.1 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.34 per unit of risk. If you would invest 255,500 in Hanwha Life Insurance on October 24, 2024 and sell it today you would lose (4,000) from holding Hanwha Life Insurance or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Nice Information Telecommunica
Performance |
| Timeline |
| Hanwha Life Insurance |
| Nice Information Tel |
Hanwha Life and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Nice Information
The main advantage of trading using opposite Hanwha Life and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| Hanwha Life vs. Jin Air Co | Hanwha Life vs. DSC Investment | Hanwha Life vs. Pureun Mutual Savings | Hanwha Life vs. Daelim Trading Co |
| Nice Information vs. Daishin Balance No8 | Nice Information vs. NAU IB Capital | Nice Information vs. Daishin Balance No | Nice Information vs. Daesung Private Equity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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