Correlation Between Dgb Financial and Hanwha Chemical
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and Hanwha Chemical 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 Dgb Financial and Hanwha Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Hanwha Chemical Corp, you can compare the effects of market volatilities on Dgb Financial and Hanwha Chemical 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 Dgb Financial with a short position of Hanwha Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Hanwha Chemical.
Diversification Opportunities for Dgb Financial and Hanwha Chemical
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dgb and Hanwha is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and Hanwha Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Chemical Corp and Dgb Financial 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 Dgb Financial are associated (or correlated) with Hanwha Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Chemical Corp has no effect on the direction of Dgb Financial i.e., Dgb Financial and Hanwha Chemical go up and down completely randomly.
Pair Corralation between Dgb Financial and Hanwha Chemical
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.15 times more return on investment than Hanwha Chemical. However, Dgb Financial is 6.66 times less risky than Hanwha Chemical. It trades about 0.97 of its potential returns per unit of risk. Hanwha Chemical Corp is currently generating about 0.14 per unit of risk. If you would invest 821,000 in Dgb Financial on November 6, 2024 and sell it today you would earn a total of 101,000 from holding Dgb Financial or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dgb Financial vs. Hanwha Chemical Corp
Performance |
| Timeline |
| Dgb Financial |
| Hanwha Chemical Corp |
Dgb Financial and Hanwha Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and Hanwha Chemical
The main advantage of trading using opposite Dgb Financial and Hanwha Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, Hanwha Chemical 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 Chemical will offset losses from the drop in Hanwha Chemical's long position.| Dgb Financial vs. Mgame Corp | Dgb Financial vs. LG Household Healthcare | Dgb Financial vs. LG Household Healthcare | Dgb Financial vs. Insung Information Co |
| Hanwha Chemical vs. Insun Environment New | Hanwha Chemical vs. Youngsin Metal Industrial | Hanwha Chemical vs. Nature and Environment | Hanwha Chemical vs. Daechang Steel Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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