Correlation Between Hanwha Life and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Sungchang Autotech 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 Sungchang Autotech 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 Sungchang Autotech Co, you can compare the effects of market volatilities on Hanwha Life and Sungchang Autotech 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 Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Sungchang Autotech.
Diversification Opportunities for Hanwha Life and Sungchang Autotech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanwha and Sungchang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech 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 Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Hanwha Life i.e., Hanwha Life and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Hanwha Life and Sungchang Autotech
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to under-perform the Sungchang Autotech. In addition to that, Hanwha Life is 1.75 times more volatile than Sungchang Autotech Co. It trades about -0.1 of its total potential returns per unit of risk. Sungchang Autotech Co is currently generating about 0.11 per unit of volatility. If you would invest 362,868 in Sungchang Autotech Co on October 16, 2024 and sell it today you would earn a total of 7,132 from holding Sungchang Autotech Co or generate 1.97% 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. Sungchang Autotech Co
Performance |
| Timeline |
| Hanwha Life Insurance |
| Sungchang Autotech |
Hanwha Life and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Sungchang Autotech
The main advantage of trading using opposite Hanwha Life and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Hanwha Life vs. DC Media Co | Hanwha Life vs. SAMG Entertainment Co | Hanwha Life vs. Choil Aluminum | Hanwha Life vs. Next Entertainment World |
| Sungchang Autotech vs. Dongbang Transport Logistics | Sungchang Autotech vs. Lotte Non Life Insurance | Sungchang Autotech vs. Genie Music | Sungchang Autotech vs. Sangsin Energy Display |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |