Correlation Between Lindeman Asia and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and Hanwha InvestmentSecuri 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 Lindeman Asia and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindeman Asia Investment and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Lindeman Asia and Hanwha InvestmentSecuri 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 Lindeman Asia with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and Hanwha InvestmentSecuri.
Diversification Opportunities for Lindeman Asia and Hanwha InvestmentSecuri
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lindeman and Hanwha is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Lindeman Asia 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 Lindeman Asia Investment are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Lindeman Asia and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Lindeman Asia Investment is 2.19 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.18 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 674,000 in Hanwha InvestmentSecurities Co on August 25, 2024 and sell it today you would earn a total of 92,000 from holding Hanwha InvestmentSecurities Co or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Lindeman Asia Investment |
| Hanwha InvestmentSecuri |
Lindeman Asia and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and Hanwha InvestmentSecuri
The main advantage of trading using opposite Lindeman Asia and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, Hanwha InvestmentSecuri 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 InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.The idea behind Lindeman Asia Investment and Hanwha InvestmentSecurities Co 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.| Hanwha InvestmentSecuri vs. ECSTELECOM Co | Hanwha InvestmentSecuri vs. Koryo Credit Information | Hanwha InvestmentSecuri vs. DB Insurance Co | Hanwha InvestmentSecuri vs. Jb Financial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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