Correlation Between Dongwoon Anatech and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Dongwoon Anatech 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 Dongwoon Anatech and Hana Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoon Anatech Co and Hana Materials, you can compare the effects of market volatilities on Dongwoon Anatech 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 Dongwoon Anatech with a short position of Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoon Anatech and Hana Materials.
Diversification Opportunities for Dongwoon Anatech and Hana Materials
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongwoon and Hana is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoon Anatech Co and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials and Dongwoon Anatech 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 Dongwoon Anatech Co 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 Dongwoon Anatech i.e., Dongwoon Anatech and Hana Materials go up and down completely randomly.
Pair Corralation between Dongwoon Anatech and Hana Materials
Assuming the 90 days trading horizon Dongwoon Anatech is expected to generate 1.17 times less return on investment than Hana Materials. But when comparing it to its historical volatility, Dongwoon Anatech Co is 1.14 times less risky than Hana Materials. It trades about 0.23 of its potential returns per unit of risk. Hana Materials is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,295,000 in Hana Materials on October 30, 2024 and sell it today you would earn a total of 360,000 from holding Hana Materials or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoon Anatech Co vs. Hana Materials
Performance |
| Timeline |
| Dongwoon Anatech |
| Hana Materials |
Dongwoon Anatech and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoon Anatech and Hana Materials
The main advantage of trading using opposite Dongwoon Anatech and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoon Anatech 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.| Dongwoon Anatech vs. SK Hynix | Dongwoon Anatech vs. LX Semicon Co | Dongwoon Anatech vs. Tokai Carbon Korea | Dongwoon Anatech vs. People Technology |
| Hana Materials vs. Jeju Air Co | Hana Materials vs. LG Display Co | Hana Materials vs. Duksan Hi Metal | Hana Materials vs. Korea Air Svc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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