Correlation Between Hanmi Financial and Juniper II

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

By analyzing existing cross correlation between Hanmi Financial and Juniper II Corp, you can compare the effects of market volatilities on Hanmi Financial and Juniper II 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 Hanmi Financial with a short position of Juniper II. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Financial and Juniper II.

Diversification Opportunities for Hanmi Financial and Juniper II

-0.31

Correlation Coefficient

Hanmi Financial  Juniper II

Very good diversification

The 3 months correlation between Hanmi and Juniper is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Financial and Juniper II Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper II Corp and Hanmi 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 Hanmi Financial are associated (or correlated) with Juniper II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper II Corp has no effect on the direction of Hanmi Financial i.e., Hanmi Financial and Juniper II go up and down completely randomly.

Pair Corralation between Hanmi Financial and Juniper II

Given the investment horizon of 90 days Hanmi Financial is expected to generate 8.06 times more return on investment than Juniper II. However, Hanmi Financial is 8.06 times more volatile than Juniper II Corp. It trades about 0.02 of its potential returns per unit of risk. Juniper II Corp is currently generating about 0.04 per unit of risk. If you would invest  2,167  in Hanmi Financial on September 29, 2024 and sell it today you would earn a total of  171.00  from holding Hanmi Financial or generate 7.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.22%
Values	Daily Returns

Hanmi Financial  vs.  Juniper II Corp

Hanmi Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanmi Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Hanmi Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Juniper II Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper II Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Juniper II is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hanmi Financial and Juniper II

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

The idea behind Hanmi Financial and Juniper II Corp 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.

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.