Correlation Between Hana Financial and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Woori Technology 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 Hana Financial and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial 7 and Woori Technology Investment, you can compare the effects of market volatilities on Hana Financial and Woori Technology 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 Hana Financial with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Woori Technology.
Diversification Opportunities for Hana Financial and Woori Technology
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hana and Woori is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and Hana 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 Hana Financial 7 are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Hana Financial i.e., Hana Financial and Woori Technology go up and down completely randomly.
Pair Corralation between Hana Financial and Woori Technology
Assuming the 90 days trading horizon Hana Financial 7 is expected to generate 2.17 times more return on investment than Woori Technology. However, Hana Financial is 2.17 times more volatile than Woori Technology Investment. It trades about 0.2 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.28 per unit of risk. If you would invest 1,903,000 in Hana Financial 7 on November 5, 2024 and sell it today you would earn a total of 277,000 from holding Hana Financial 7 or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial 7 vs. Woori Technology Investment
Performance |
| Timeline |
| Hana Financial 7 |
| Woori Technology Inv |
Hana Financial and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Woori Technology
The main advantage of trading using opposite Hana Financial and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.The idea behind Hana Financial 7 and Woori Technology Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. AfreecaTV Co | Woori Technology vs. CJ ENM |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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