Correlation Between Lion Chemtech and Hana Financial
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech 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 Lion Chemtech and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and Hana Financial, you can compare the effects of market volatilities on Lion Chemtech 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 Lion Chemtech with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Hana Financial.
Diversification Opportunities for Lion Chemtech and Hana Financial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Hana is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Lion Chemtech 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 Lion Chemtech Co 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 Lion Chemtech i.e., Lion Chemtech and Hana Financial go up and down completely randomly.
Pair Corralation between Lion Chemtech and Hana Financial
Assuming the 90 days trading horizon Lion Chemtech Co is expected to under-perform the Hana Financial. In addition to that, Lion Chemtech is 2.59 times more volatile than Hana Financial. It trades about -0.02 of its total potential returns per unit of risk. Hana Financial is currently generating about -0.05 per unit of volatility. If you would invest 5,970,000 in Hana Financial on October 14, 2024 and sell it today you would lose (110,000) from holding Hana Financial or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. Hana Financial
Performance |
| Timeline |
| Lion Chemtech |
| Hana Financial |
Lion Chemtech and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Hana Financial
The main advantage of trading using opposite Lion Chemtech and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech 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.| Lion Chemtech vs. Insun Environment New | Lion Chemtech vs. Duksan Hi Metal | Lion Chemtech vs. Air Busan Co | Lion Chemtech vs. Daehan Steel |
| Hana Financial vs. V One Tech Co | Hana Financial vs. Daishin Information Communications | Hana Financial vs. Lion Chemtech Co | Hana Financial vs. PH Tech 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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