Correlation Between SS TECH and Hanwha Aerospace
Can any of the company-specific risk be diversified away by investing in both SS TECH and Hanwha Aerospace 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 SS TECH and Hanwha Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Hanwha Aerospace Co, you can compare the effects of market volatilities on SS TECH and Hanwha Aerospace 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 SS TECH with a short position of Hanwha Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Hanwha Aerospace.
Diversification Opportunities for SS TECH and Hanwha Aerospace
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 101490 and Hanwha is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Hanwha Aerospace Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Aerospace and SS TECH 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 SS TECH are associated (or correlated) with Hanwha Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Aerospace has no effect on the direction of SS TECH i.e., SS TECH and Hanwha Aerospace go up and down completely randomly.
Pair Corralation between SS TECH and Hanwha Aerospace
Assuming the 90 days trading horizon SS TECH is expected to generate 0.84 times more return on investment than Hanwha Aerospace. However, SS TECH is 1.18 times less risky than Hanwha Aerospace. It trades about 0.04 of its potential returns per unit of risk. Hanwha Aerospace Co is currently generating about -0.16 per unit of risk. If you would invest 2,315,000 in SS TECH on August 29, 2024 and sell it today you would earn a total of 50,000 from holding SS TECH or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Hanwha Aerospace Co
Performance |
| Timeline |
| SS TECH |
| Hanwha Aerospace |
SS TECH and Hanwha Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Hanwha Aerospace
The main advantage of trading using opposite SS TECH and Hanwha Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Hanwha Aerospace 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 Hanwha Aerospace will offset losses from the drop in Hanwha Aerospace's long position.| SS TECH vs. Daou Data Corp | SS TECH vs. Busan Industrial Co | SS TECH vs. Busan Ind | SS TECH vs. Shinhan WTI Futures |
| Hanwha Aerospace vs. Samsung Electronics Co | Hanwha Aerospace vs. Samsung Electronics Co | Hanwha Aerospace vs. KB Financial Group | Hanwha Aerospace vs. Shinhan Financial Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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