Correlation Between Cots Technology and Hana Financial
Can any of the company-specific risk be diversified away by investing in both Cots Technology and Hana Financial 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 Cots Technology and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cots Technology Co and Hana Financial, you can compare the effects of market volatilities on Cots Technology and Hana Financial 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 Cots Technology with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and Hana Financial.
Diversification Opportunities for Cots Technology and Hana Financial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cots and Hana is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology Co and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Cots Technology 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 Cots Technology Co are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of Cots Technology i.e., Cots Technology and Hana Financial go up and down completely randomly.
Pair Corralation between Cots Technology and Hana Financial
Assuming the 90 days trading horizon Cots Technology is expected to generate 1.33 times less return on investment than Hana Financial. In addition to that, Cots Technology is 2.35 times more volatile than Hana Financial. It trades about 0.02 of its total potential returns per unit of risk. Hana Financial is currently generating about 0.06 per unit of volatility. If you would invest 3,860,567 in Hana Financial on November 28, 2024 and sell it today you would earn a total of 2,339,433 from holding Hana Financial or generate 60.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.87% |
| Values | Daily Returns |
Cots Technology Co vs. Hana Financial
Performance |
| Timeline |
| Cots Technology |
| Hana Financial |
Cots Technology and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and Hana Financial
The main advantage of trading using opposite Cots Technology and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots Technology position performs unexpectedly, Hana Financial 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 Hana Financial will offset losses from the drop in Hana Financial's long position.| Cots Technology vs. Hwangkum Steel Technology | Cots Technology vs. Mobileleader CoLtd | Cots Technology vs. iNtRON Biotechnology | Cots Technology vs. Daishin Information Communications |
| Hana Financial vs. System and Application | Hana Financial vs. Insung Information Co | Hana Financial vs. Daishin Information Communications | Hana Financial vs. Daejung Chemicals Metals |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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