Correlation Between Hanjoo Light and DB Financial
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and DB 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 Hanjoo Light and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and DB Financial Investment, you can compare the effects of market volatilities on Hanjoo Light and DB 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 Hanjoo Light with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and DB Financial.
Diversification Opportunities for Hanjoo Light and DB Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjoo and 016610 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Hanjoo Light 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 Hanjoo Light Metal are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and DB Financial go up and down completely randomly.
Pair Corralation between Hanjoo Light and DB Financial
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to generate 2.24 times more return on investment than DB Financial. However, Hanjoo Light is 2.24 times more volatile than DB Financial Investment. It trades about 0.31 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.51 per unit of risk. If you would invest 77,400 in Hanjoo Light Metal on November 7, 2024 and sell it today you would earn a total of 4,700 from holding Hanjoo Light Metal or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. DB Financial Investment
Performance |
| Timeline |
| Hanjoo Light Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DB Financial Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Hanjoo Light and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and DB Financial
The main advantage of trading using opposite Hanjoo Light and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, DB 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 DB Financial will offset losses from the drop in DB Financial's long position.| Hanjoo Light vs. Hana Financial | Hanjoo Light vs. Hanwha Chemical Corp | Hanjoo Light vs. Settlebank | Hanjoo Light vs. Automobile Pc |
| DB Financial vs. SK Chemicals Co | DB Financial vs. JC Chemical Co | DB Financial vs. Bosung Power Technology | DB Financial vs. Kg Chemical |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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