Correlation Between Hanwha Life and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Netmarble Games 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 Netmarble Games 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 Netmarble Games Corp, you can compare the effects of market volatilities on Hanwha Life and Netmarble Games 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 Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Netmarble Games.
Diversification Opportunities for Hanwha Life and Netmarble Games
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and Netmarble is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp 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 Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of Hanwha Life i.e., Hanwha Life and Netmarble Games go up and down completely randomly.
Pair Corralation between Hanwha Life and Netmarble Games
Assuming the 90 days trading horizon Hanwha Life Insurance is expected to generate 0.69 times more return on investment than Netmarble Games. However, Hanwha Life Insurance is 1.45 times less risky than Netmarble Games. It trades about -0.12 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.19 per unit of risk. If you would invest 269,500 in Hanwha Life Insurance on October 30, 2024 and sell it today you would lose (22,500) from holding Hanwha Life Insurance or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Life Insurance vs. Netmarble Games Corp
Performance |
| Timeline |
| Hanwha Life Insurance |
| Netmarble Games Corp |
Hanwha Life and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Life and Netmarble Games
The main advantage of trading using opposite Hanwha Life and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Life position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.| Hanwha Life vs. Korea Computer | Hanwha Life vs. Inzi Display CoLtd | Hanwha Life vs. Tae Kyung Chemical | Hanwha Life vs. TK Chemical |
| Netmarble Games vs. DAEDUCK ELECTRONICS CoLtd | Netmarble Games vs. SEOJEON ELECTRIC MACHINERY | Netmarble Games vs. Seohee Construction Co | Netmarble Games vs. PJ Electronics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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