Correlation Between Techwing and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Techwing and Hana Materials 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 Techwing and Hana Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techwing and Hana Materials, you can compare the effects of market volatilities on Techwing and Hana Materials 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 Techwing with a short position of Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techwing and Hana Materials.
Diversification Opportunities for Techwing and Hana Materials
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Techwing and Hana is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Techwing and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials and Techwing 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 Techwing are associated (or correlated) with Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of Techwing i.e., Techwing and Hana Materials go up and down completely randomly.
Pair Corralation between Techwing and Hana Materials
Assuming the 90 days trading horizon Techwing is expected to generate 1.31 times more return on investment than Hana Materials. However, Techwing is 1.31 times more volatile than Hana Materials. It trades about 0.42 of its potential returns per unit of risk. Hana Materials is currently generating about 0.27 per unit of risk. If you would invest 3,425,000 in Techwing on October 21, 2024 and sell it today you would earn a total of 1,400,000 from holding Techwing or generate 40.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Techwing vs. Hana Materials
Performance |
Timeline |
Techwing |
Hana Materials |
Techwing and Hana Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Techwing and Hana Materials
The main advantage of trading using opposite Techwing and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techwing position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.Techwing vs. Samsung Electronics Co | Techwing vs. Samsung Electronics Co | Techwing vs. LG Energy Solution | Techwing vs. SK Hynix |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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