Correlation Between Hanwha Life and Kiwoom
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Kiwoom 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 Kiwoom 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 Kiwoom, you can compare the effects of market volatilities on Hanwha Life and Kiwoom 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 Kiwoom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Kiwoom.
Diversification Opportunities for Hanwha Life and Kiwoom
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and Kiwoom is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Kiwoom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiwoom 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 Kiwoom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiwoom has no effect on the direction of Hanwha Life i.e., Hanwha Life and Kiwoom go up and down completely randomly.
Pair Corralation between Hanwha Life and Kiwoom
Assuming the 90 days trading horizon Hanwha Life is expected to generate 5.3 times less return on investment than Kiwoom. But when comparing it to its historical volatility, Hanwha Life Insurance is 1.86 times less risky than Kiwoom. It trades about 0.15 of its potential returns per unit of risk. Kiwoom is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 11,240,000 in Kiwoom on November 3, 2024 and sell it today you would earn a total of 1,280,000 from holding Kiwoom or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Kiwoom
Performance |
| Timeline |
| Hanwha Life Insurance |
| Kiwoom |
Hanwha Life and Kiwoom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Kiwoom
The main advantage of trading using opposite Hanwha Life and Kiwoom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Kiwoom 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 Kiwoom will offset losses from the drop in Kiwoom's long position.| Hanwha Life vs. AptaBio Therapeutics | Hanwha Life vs. Daewoo SBI SPAC | Hanwha Life vs. Dream Security co | Hanwha Life vs. Microfriend |
| Kiwoom vs. TJ media Co | Kiwoom vs. EBEST Investment Securities | Kiwoom vs. Daol Investment Securities | Kiwoom vs. NH Investment Securities |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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