Correlation Between Hanwha InvestmentSecuri and COWAY

Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and COWAY 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 COWAY 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 COWAY Co, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and COWAY 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 COWAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and COWAY.

Diversification Opportunities for Hanwha InvestmentSecuri and COWAY

-0.62

Correlation Coefficient

Hanwha InvestmentSecuri  COWAY

Excellent diversification

The 3 months correlation between Hanwha and COWAY is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and COWAY Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWAY 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 COWAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWAY has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and COWAY go up and down completely randomly.

Pair Corralation between Hanwha InvestmentSecuri and COWAY

Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 1.57 times more return on investment than COWAY. However, Hanwha InvestmentSecuri is 1.57 times more volatile than COWAY Co. It trades about 0.03 of its potential returns per unit of risk. COWAY Co is currently generating about 0.01 per unit of risk. If you would invest  347,000  in Hanwha InvestmentSecurities Co on September 3, 2024 and sell it today you would earn a total of  6,500  from holding Hanwha InvestmentSecurities Co or generate 1.87% 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.  COWAY Co

Hanwha InvestmentSecuri

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanwha InvestmentSecurities Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hanwha InvestmentSecuri is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

COWAY

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hanwha InvestmentSecuri and COWAY

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

The idea behind Hanwha InvestmentSecurities Co and COWAY 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.