Correlation Between Hanwha InvestmentSecuri and Mirai Semiconductors

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

Diversification Opportunities for Hanwha InvestmentSecuri and Mirai Semiconductors

-0.56

Correlation Coefficient

Hanwha InvestmentSecuri  Mirai Semiconductors

Excellent diversification

The 3 months correlation between Hanwha and Mirai is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and Mirai Semiconductors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirai Semiconductors 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 Mirai Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirai Semiconductors has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and Mirai Semiconductors go up and down completely randomly.

Pair Corralation between Hanwha InvestmentSecuri and Mirai Semiconductors

Assuming the 90 days trading horizon Hanwha InvestmentSecuri is expected to generate 2.09 times less return on investment than Mirai Semiconductors. But when comparing it to its historical volatility, Hanwha InvestmentSecurities Co is 1.15 times less risky than Mirai Semiconductors. It trades about 0.02 of its potential returns per unit of risk. Mirai Semiconductors Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,164,000  in Mirai Semiconductors Co on December 10, 2024 and sell it today you would earn a total of  41,000  from holding Mirai Semiconductors Co or generate 3.52% return on investment over 90 days.

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

Hanwha InvestmentSecurities Co  vs.  Mirai Semiconductors Co

Hanwha InvestmentSecuri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanwha InvestmentSecurities 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mirai Semiconductors

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mirai Semiconductors Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirai Semiconductors sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanwha InvestmentSecuri and Mirai Semiconductors

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

The idea behind Hanwha InvestmentSecurities Co and Mirai Semiconductors 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.