Correlation Between Hana Financial and Actoz Soft

Can any of the company-specific risk be diversified away by investing in both Hana Financial and Actoz Soft 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 Hana Financial and Actoz Soft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hana Financial 7 and Actoz Soft CoLtd, you can compare the effects of market volatilities on Hana Financial and Actoz Soft 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 Hana Financial with a short position of Actoz Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Actoz Soft.

Diversification Opportunities for Hana Financial and Actoz Soft

0.68

Correlation Coefficient

Hana Financial  Actoz Soft

Poor diversification

The 3 months correlation between Hana and Actoz is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and Actoz Soft CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actoz Soft CoLtd and Hana Financial 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 Hana Financial 7 are associated (or correlated) with Actoz Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actoz Soft CoLtd has no effect on the direction of Hana Financial i.e., Hana Financial and Actoz Soft go up and down completely randomly.

Pair Corralation between Hana Financial and Actoz Soft

Assuming the 90 days trading horizon Hana Financial 7 is expected to generate 1.68 times more return on investment than Actoz Soft. However, Hana Financial is 1.68 times more volatile than Actoz Soft CoLtd. It trades about 0.44 of its potential returns per unit of risk. Actoz Soft CoLtd is currently generating about 0.03 per unit of risk. If you would invest  992,000  in Hana Financial 7 on September 25, 2024 and sell it today you would earn a total of  630,000  from holding Hana Financial 7 or generate 63.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Hana Financial 7  vs.  Actoz Soft CoLtd

Hana Financial 7

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Financial 7 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Actoz Soft CoLtd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Actoz Soft may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hana Financial and Actoz Soft

The main advantage of trading using opposite Hana Financial and Actoz Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Actoz Soft 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 Actoz Soft will offset losses from the drop in Actoz Soft's long position.

The idea behind Hana Financial 7 and Actoz Soft CoLtd 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.