Correlation Between Cuckoo Electronics and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics 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 Cuckoo Electronics and Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and Hanwha Life Insurance, you can compare the effects of market volatilities on Cuckoo Electronics 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 Cuckoo Electronics with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Hanwha Life.
Diversification Opportunities for Cuckoo Electronics and Hanwha Life
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cuckoo and Hanwha is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co 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 Cuckoo Electronics 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 Cuckoo Electronics Co 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 Cuckoo Electronics i.e., Cuckoo Electronics and Hanwha Life go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Hanwha Life
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to generate 0.83 times more return on investment than Hanwha Life. However, Cuckoo Electronics Co is 1.2 times less risky than Hanwha Life. It trades about 0.09 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.05 per unit of risk. If you would invest 1,655,000 in Cuckoo Electronics Co on November 8, 2024 and sell it today you would earn a total of 625,000 from holding Cuckoo Electronics Co or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Hanwha Life Insurance
Performance |
| Timeline |
| Cuckoo Electronics |
| Hanwha Life Insurance |
Cuckoo Electronics and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Hanwha Life
The main advantage of trading using opposite Cuckoo Electronics and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics 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.| Cuckoo Electronics vs. SEOJEON ELECTRIC MACHINERY | Cuckoo Electronics vs. Bookook Steel | Cuckoo Electronics vs. ENERGYMACHINERY KOREA CoLtd | Cuckoo Electronics vs. Dongil Steel Co |
| Hanwha Life vs. Daejung Chemicals Metals | Hanwha Life vs. Daishin Information Communications | Hanwha Life vs. Kbi Metal Co | Hanwha Life vs. Nable Communications |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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