Correlation Between Kosdaq Composite and Hanwha Chemical
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By analyzing existing cross correlation between Kosdaq Composite Index and Hanwha Chemical Corp, you can compare the effects of market volatilities on Kosdaq Composite and Hanwha Chemical 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 Kosdaq Composite with a short position of Hanwha Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Hanwha Chemical.
Diversification Opportunities for Kosdaq Composite and Hanwha Chemical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Hanwha is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Hanwha Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Chemical Corp and Kosdaq Composite 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 Kosdaq Composite Index are associated (or correlated) with Hanwha Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Chemical Corp has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Hanwha Chemical go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Hanwha Chemical
Assuming the 90 days trading horizon Kosdaq Composite is expected to generate 7.69 times less return on investment than Hanwha Chemical. But when comparing it to its historical volatility, Kosdaq Composite Index is 5.63 times less risky than Hanwha Chemical. It trades about 0.1 of its potential returns per unit of risk. Hanwha Chemical Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,794,000 in Hanwha Chemical Corp on November 6, 2024 and sell it today you would earn a total of 183,000 from holding Hanwha Chemical Corp or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Hanwha Chemical Corp
Performance |
| Timeline |
Kosdaq Composite and Hanwha Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Hanwha Chemical Corp
Pair trading matchups for Hanwha Chemical
Pair Trading with Kosdaq Composite and Hanwha Chemical
The main advantage of trading using opposite Kosdaq Composite and Hanwha Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Hanwha Chemical 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 Chemical will offset losses from the drop in Hanwha Chemical's long position.| Kosdaq Composite vs. Dongwoo Farm To | Kosdaq Composite vs. Kyeryong Construction Industrial | Kosdaq Composite vs. T3 Entertainment Co | Kosdaq Composite vs. FNC Entertainment Co |
| Hanwha Chemical vs. Insun Environment New | Hanwha Chemical vs. Youngsin Metal Industrial | Hanwha Chemical vs. Nature and Environment | Hanwha Chemical vs. Daechang Steel Co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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