Correlation Between Hana Technology and COWINTECH

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

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

Diversification Opportunities for Hana Technology and COWINTECH

0.4

Correlation Coefficient

Hana Technology  COWINTECH

Very weak diversification

The 3 months correlation between Hana and COWINTECH is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hana Technology Co and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH and Hana 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 Hana Technology Co are associated (or correlated) with COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of Hana Technology i.e., Hana Technology and COWINTECH go up and down completely randomly.

Pair Corralation between Hana Technology and COWINTECH

Assuming the 90 days trading horizon Hana Technology Co is expected to under-perform the COWINTECH. But the stock apears to be less risky and, when comparing its historical volatility, Hana Technology Co is 1.67 times less risky than COWINTECH. The stock trades about -0.31 of its potential returns per unit of risk. The COWINTECH Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,361,000  in COWINTECH Co on September 2, 2024 and sell it today you would earn a total of  17,000  from holding COWINTECH Co or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hana Technology Co  vs.  COWINTECH Co

Hana Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hana Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

COWINTECH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COWINTECH Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, COWINTECH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hana Technology and COWINTECH

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

The idea behind Hana Technology Co and COWINTECH Co 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 CEOs Directory module to screen CEOs from public companies around the world.