Correlation Between Hanwha InvestmentSecuri and WONIK Materials
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and WONIK Materials 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 InvestmentSecuri and WONIK Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha InvestmentSecurities Co and WONIK Materials CoLtd, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and WONIK Materials 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 InvestmentSecuri with a short position of WONIK Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and WONIK Materials.
Diversification Opportunities for Hanwha InvestmentSecuri and WONIK Materials
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanwha and WONIK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and WONIK Materials CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WONIK Materials CoLtd and Hanwha InvestmentSecuri 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 InvestmentSecurities Co are associated (or correlated) with WONIK Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WONIK Materials CoLtd has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and WONIK Materials go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and WONIK Materials
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 2.26 times more return on investment than WONIK Materials. However, Hanwha InvestmentSecuri is 2.26 times more volatile than WONIK Materials CoLtd. It trades about 0.04 of its potential returns per unit of risk. WONIK Materials CoLtd is currently generating about -0.27 per unit of risk. If you would invest 660,000 in Hanwha InvestmentSecurities Co on September 26, 2024 and sell it today you would earn a total of 40,000 from holding Hanwha InvestmentSecurities Co or generate 6.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. WONIK Materials CoLtd
Performance |
Timeline |
Hanwha InvestmentSecuri |
WONIK Materials CoLtd |
Hanwha InvestmentSecuri and WONIK Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanwha InvestmentSecuri and WONIK Materials
The main advantage of trading using opposite Hanwha InvestmentSecuri and WONIK Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri position performs unexpectedly, WONIK Materials 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 WONIK Materials will offset losses from the drop in WONIK Materials' long position.Hanwha InvestmentSecuri vs. Nh Investment And | Hanwha InvestmentSecuri vs. Company K Partners | Hanwha InvestmentSecuri vs. FnGuide | Hanwha InvestmentSecuri vs. DSC Investment |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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