Correlation Between TK Chemical and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both TK Chemical and Hanwha Life 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 TK Chemical and Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TK Chemical and Hanwha Life Insurance, you can compare the effects of market volatilities on TK Chemical and Hanwha Life 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 TK Chemical with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Hanwha Life.
Diversification Opportunities for TK Chemical and Hanwha Life
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 104480 and Hanwha is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance and TK Chemical 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 TK Chemical are associated (or correlated) with Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of TK Chemical i.e., TK Chemical and Hanwha Life go up and down completely randomly.
Pair Corralation between TK Chemical and Hanwha Life
Assuming the 90 days trading horizon TK Chemical is expected to under-perform the Hanwha Life. In addition to that, TK Chemical is 2.17 times more volatile than Hanwha Life Insurance. It trades about -0.51 of its total potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.13 per unit of volatility. If you would invest 254,500 in Hanwha Life Insurance on October 25, 2024 and sell it today you would lose (5,500) from holding Hanwha Life Insurance or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TK Chemical vs. Hanwha Life Insurance
Performance |
| Timeline |
| TK Chemical |
| Hanwha Life Insurance |
TK Chemical and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TK Chemical and Hanwha Life
The main advantage of trading using opposite TK Chemical and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TK Chemical position performs unexpectedly, Hanwha Life 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 Life will offset losses from the drop in Hanwha Life's long position.| TK Chemical vs. Samsung Electronics Co | TK Chemical vs. Samsung Electronics Co | TK Chemical vs. KB Financial Group | TK Chemical vs. Shinhan Financial Group |
| Hanwha Life vs. Hanshin Construction Co | Hanwha Life vs. Lotte Non Life Insurance | Hanwha Life vs. Shinsegae Engineering Construction | Hanwha Life vs. Wireless Power Amplifier |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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