Correlation Between Hanwha Life and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Korea Electronic 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 Korea Electronic 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 Korea Electronic Certification, you can compare the effects of market volatilities on Hanwha Life and Korea Electronic 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 Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Korea Electronic.
Diversification Opportunities for Hanwha Life and Korea Electronic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanwha and Korea is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Hanwha Life i.e., Hanwha Life and Korea Electronic go up and down completely randomly.
Pair Corralation between Hanwha Life and Korea Electronic
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to under-perform the Korea Electronic. In addition to that, Hanwha Life is 1.03 times more volatile than Korea Electronic Certification. It trades about -0.1 of its total potential returns per unit of risk. Korea Electronic Certification is currently generating about 0.18 per unit of volatility. If you would invest 292,453 in Korea Electronic Certification on October 16, 2024 and sell it today you would earn a total of 16,047 from holding Korea Electronic Certification or generate 5.49% 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. Korea Electronic Certification
Performance |
| Timeline |
| Hanwha Life Insurance |
| Korea Electronic Cer |
Hanwha Life and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Korea Electronic
The main advantage of trading using opposite Hanwha Life and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic's long position.| Hanwha Life vs. SK Chemicals Co | Hanwha Life vs. Techwing | Hanwha Life vs. Raontech | Hanwha Life vs. SEOWONINTECHCoLtd |
| Korea Electronic vs. Jin Air Co | Korea Electronic vs. Hanwha Life Insurance | Korea Electronic vs. Cloud Air CoLtd | Korea Electronic vs. DB Insurance 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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