Correlation Between Hana Financial and INSUN Environmental
Can any of the company-specific risk be diversified away by investing in both Hana Financial and INSUN Environmental 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 INSUN Environmental 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 INSUN Environmental New, you can compare the effects of market volatilities on Hana Financial and INSUN Environmental 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 INSUN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and INSUN Environmental.
Diversification Opportunities for Hana Financial and INSUN Environmental
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hana and INSUN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and INSUN Environmental New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSUN Environmental New 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 INSUN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSUN Environmental New has no effect on the direction of Hana Financial i.e., Hana Financial and INSUN Environmental go up and down completely randomly.
Pair Corralation between Hana Financial and INSUN Environmental
Assuming the 90 days trading horizon Hana Financial 7 is expected to generate 1.5 times more return on investment than INSUN Environmental. However, Hana Financial is 1.5 times more volatile than INSUN Environmental New. It trades about 0.44 of its potential returns per unit of risk. INSUN Environmental New is currently generating about 0.12 per unit of risk. If you would invest 992,000 in Hana Financial 7 on September 25, 2024 and sell it today you would earn a total of 630,000 from holding Hana Financial 7 or generate 63.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hana Financial 7 vs. INSUN Environmental New
Performance |
| Timeline |
| Hana Financial 7 |
| INSUN Environmental New |
Hana Financial and INSUN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and INSUN Environmental
The main advantage of trading using opposite Hana Financial and INSUN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, INSUN Environmental 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 INSUN Environmental will offset losses from the drop in INSUN Environmental's long position.| Hana Financial vs. Ananti Inc | Hana Financial vs. SS TECH | Hana Financial vs. Vieworks Co | Hana Financial vs. Shinsung Delta Tech |
| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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