Correlation Between Daewoo SBI and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI 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 Daewoo SBI and Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Hanwha Life Insurance, you can compare the effects of market volatilities on Daewoo SBI 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 Daewoo SBI with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Hanwha Life.
Diversification Opportunities for Daewoo SBI and Hanwha Life
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daewoo and Hanwha is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC 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 Daewoo SBI 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 Daewoo SBI SPAC 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 Daewoo SBI i.e., Daewoo SBI and Hanwha Life go up and down completely randomly.
Pair Corralation between Daewoo SBI and Hanwha Life
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Hanwha Life. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 1.15 times less risky than Hanwha Life. The stock trades about -0.03 of its potential returns per unit of risk. The Hanwha Life Insurance is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 274,147 in Hanwha Life Insurance on October 13, 2024 and sell it today you would lose (24,147) from holding Hanwha Life Insurance or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Hanwha Life Insurance
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Hanwha Life Insurance |
Daewoo SBI and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Hanwha Life
The main advantage of trading using opposite Daewoo SBI and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI 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.| Daewoo SBI vs. SEOWONINTECHCoLtd | Daewoo SBI vs. Orbitech Co | Daewoo SBI vs. Yura Tech Co | Daewoo SBI vs. Narae Nanotech Corp |
| Hanwha Life vs. AptaBio Therapeutics | Hanwha Life vs. Daewoo SBI SPAC | Hanwha Life vs. Dream Security co | Hanwha Life vs. Microfriend |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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