Correlation Between Alton Sports and Hana Financial
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Hana Financial 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 Alton Sports and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Hana Financial, you can compare the effects of market volatilities on Alton Sports and Hana Financial 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 Alton Sports with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Hana Financial.
Diversification Opportunities for Alton Sports and Hana Financial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alton and Hana is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of Alton Sports i.e., Alton Sports and Hana Financial go up and down completely randomly.
Pair Corralation between Alton Sports and Hana Financial
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 1.17 times more return on investment than Hana Financial. However, Alton Sports is 1.17 times more volatile than Hana Financial. It trades about 0.35 of its potential returns per unit of risk. Hana Financial is currently generating about 0.39 per unit of risk. If you would invest 144,000 in Alton Sports CoLtd on November 3, 2024 and sell it today you would earn a total of 10,000 from holding Alton Sports CoLtd or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Hana Financial
Performance |
| Timeline |
| Alton Sports CoLtd |
| Hana Financial |
Alton Sports and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Hana Financial
The main advantage of trading using opposite Alton Sports and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Hana Financial 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 Financial will offset losses from the drop in Hana Financial's long position.| Alton Sports vs. Samyung Trading Co | Alton Sports vs. Coloray International Investment | Alton Sports vs. Sangsangin Investment Securities | Alton Sports vs. TS Investment Corp |
| Hana Financial vs. Hanjin Transportation Co | Hana Financial vs. Seoul Food Industrial | Hana Financial vs. Daiyang Metal Co | Hana Financial vs. Industrial Bank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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