Correlation Between Hanwha ARIRANG and Hanwha Galleria
Can any of the company-specific risk be diversified away by investing in both Hanwha ARIRANG and Hanwha Galleria 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 Hanwha ARIRANG and Hanwha Galleria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha ARIRANG KTB and Hanwha Galleria Corp, you can compare the effects of market volatilities on Hanwha ARIRANG and Hanwha Galleria 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 Hanwha ARIRANG with a short position of Hanwha Galleria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha ARIRANG and Hanwha Galleria.
Diversification Opportunities for Hanwha ARIRANG and Hanwha Galleria
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanwha and Hanwha is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha ARIRANG KTB and Hanwha Galleria Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Galleria Corp and Hanwha ARIRANG 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 Hanwha ARIRANG KTB are associated (or correlated) with Hanwha Galleria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Galleria Corp has no effect on the direction of Hanwha ARIRANG i.e., Hanwha ARIRANG and Hanwha Galleria go up and down completely randomly.
Pair Corralation between Hanwha ARIRANG and Hanwha Galleria
Assuming the 90 days trading horizon Hanwha ARIRANG is expected to generate 1.65 times less return on investment than Hanwha Galleria. But when comparing it to its historical volatility, Hanwha ARIRANG KTB is 2.57 times less risky than Hanwha Galleria. It trades about 0.43 of its potential returns per unit of risk. Hanwha Galleria Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,148,694 in Hanwha Galleria Corp on September 2, 2024 and sell it today you would earn a total of 53,306 from holding Hanwha Galleria Corp or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hanwha ARIRANG KTB vs. Hanwha Galleria Corp
Performance |
| Timeline |
| Hanwha ARIRANG KTB |
| Hanwha Galleria Corp |
Hanwha ARIRANG and Hanwha Galleria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha ARIRANG and Hanwha Galleria
The main advantage of trading using opposite Hanwha ARIRANG and Hanwha Galleria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha ARIRANG position performs unexpectedly, Hanwha Galleria 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 Galleria will offset losses from the drop in Hanwha Galleria's long position.| Hanwha ARIRANG vs. Busan Industrial Co | Hanwha ARIRANG vs. Busan Ind | Hanwha ARIRANG vs. Mirae Asset Daewoo | Hanwha ARIRANG vs. Shinhan WTI Futures |
| Hanwha Galleria vs. Hanwha ARIRANG KTB | Hanwha Galleria vs. Hanwha ARIRANG KOSPI50 | Hanwha Galleria vs. Hanwha ARIRANG SP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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