Correlation Between Hanwha Life and Dongwoon Anatech
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Dongwoon Anatech 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 Dongwoon Anatech 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 Dongwoon Anatech Co, you can compare the effects of market volatilities on Hanwha Life and Dongwoon Anatech 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 Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Dongwoon Anatech.
Diversification Opportunities for Hanwha Life and Dongwoon Anatech
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanwha and Dongwoon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech 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 Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Hanwha Life i.e., Hanwha Life and Dongwoon Anatech go up and down completely randomly.
Pair Corralation between Hanwha Life and Dongwoon Anatech
Assuming the 90 days trading horizon Hanwha Life is expected to generate 29.89 times less return on investment than Dongwoon Anatech. But when comparing it to its historical volatility, Hanwha Life Insurance is 4.45 times less risky than Dongwoon Anatech. It trades about 0.03 of its potential returns per unit of risk. Dongwoon Anatech Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,799,000 in Dongwoon Anatech Co on October 31, 2024 and sell it today you would earn a total of 241,000 from holding Dongwoon Anatech Co or generate 13.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hanwha Life Insurance vs. Dongwoon Anatech Co
Performance |
Timeline |
Hanwha Life Insurance |
Dongwoon Anatech |
Hanwha Life and Dongwoon Anatech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanwha Life and Dongwoon Anatech
The main advantage of trading using opposite Hanwha Life and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.Hanwha Life vs. Korea Alcohol Industrial | Hanwha Life vs. Cuckoo Electronics Co | Hanwha Life vs. UJU Electronics Co | Hanwha Life vs. KTB Investment Securities |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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