Correlation Between Hana Financial and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Daishin Balance 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 Daishin Balance 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 Daishin Balance 1, you can compare the effects of market volatilities on Hana Financial and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Daishin Balance.
Diversification Opportunities for Hana Financial and Daishin Balance
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Daishin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and Daishin Balance 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance 1 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance 1 has no effect on the direction of Hana Financial i.e., Hana Financial and Daishin Balance go up and down completely randomly.
Pair Corralation between Hana Financial and Daishin Balance
Assuming the 90 days trading horizon Hana Financial 7 is expected to generate 1.49 times more return on investment than Daishin Balance. However, Hana Financial is 1.49 times more volatile than Daishin Balance 1. It trades about 0.31 of its potential returns per unit of risk. Daishin Balance 1 is currently generating about 0.06 per unit of risk. If you would invest 986,975 in Hana Financial 7 on October 29, 2024 and sell it today you would earn a total of 1,308,025 from holding Hana Financial 7 or generate 132.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial 7 vs. Daishin Balance 1
Performance |
| Timeline |
| Hana Financial 7 |
| Daishin Balance 1 |
Hana Financial and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Daishin Balance
The main advantage of trading using opposite Hana Financial and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Hana Financial vs. Ananti Inc | Hana Financial vs. SS TECH | Hana Financial vs. Vieworks Co | Hana Financial vs. Shinsung Delta Tech |
| Daishin Balance vs. Daishin Information Communications | Daishin Balance vs. Daechang Steel Co | Daishin Balance vs. INSUN Environmental New | Daishin Balance vs. Jeong Moon Information |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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