Correlation Between Apple and Hanwha ARIRANG
Can any of the company-specific risk be diversified away by investing in both Apple and Hanwha ARIRANG 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 Apple and Hanwha ARIRANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Hanwha ARIRANG KOSPI50, you can compare the effects of market volatilities on Apple and Hanwha ARIRANG 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 Apple with a short position of Hanwha ARIRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Hanwha ARIRANG.
Diversification Opportunities for Apple and Hanwha ARIRANG
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Hanwha is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Hanwha ARIRANG KOSPI50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha ARIRANG KOSPI50 and Apple 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 Apple Inc are associated (or correlated) with Hanwha ARIRANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha ARIRANG KOSPI50 has no effect on the direction of Apple i.e., Apple and Hanwha ARIRANG go up and down completely randomly.
Pair Corralation between Apple and Hanwha ARIRANG
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Hanwha ARIRANG. In addition to that, Apple is 1.33 times more volatile than Hanwha ARIRANG KOSPI50. It trades about -0.39 of its total potential returns per unit of risk. Hanwha ARIRANG KOSPI50 is currently generating about 0.2 per unit of volatility. If you would invest 2,246,000 in Hanwha ARIRANG KOSPI50 on October 23, 2024 and sell it today you would earn a total of 86,500 from holding Hanwha ARIRANG KOSPI50 or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Hanwha ARIRANG KOSPI50
Performance |
| Timeline |
| Apple Inc |
| Hanwha ARIRANG KOSPI50 |
Apple and Hanwha ARIRANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Hanwha ARIRANG
The main advantage of trading using opposite Apple and Hanwha ARIRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Hanwha ARIRANG 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 ARIRANG will offset losses from the drop in Hanwha ARIRANG's long position.The idea behind Apple Inc and Hanwha ARIRANG KOSPI50 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 ARIRANG vs. Hanwha Galleria Corp | Hanwha ARIRANG vs. Hanwha ARIRANG KTB | Hanwha ARIRANG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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