Correlation Between Hanwha Solutions and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions and Dow Jones 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 Solutions and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and Dow Jones Industrial, you can compare the effects of market volatilities on Hanwha Solutions and Dow Jones 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 Solutions with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and Dow Jones.
Diversification Opportunities for Hanwha Solutions and Dow Jones
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanwha and Dow is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Hanwha Solutions 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 Solutions are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hanwha Solutions i.e., Hanwha Solutions and Dow Jones go up and down completely randomly.
Pair Corralation between Hanwha Solutions and Dow Jones
Assuming the 90 days trading horizon Hanwha Solutions is expected to generate 5.55 times more return on investment than Dow Jones. However, Hanwha Solutions is 5.55 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of risk. If you would invest 1,608,192 in Hanwha Solutions on December 1, 2024 and sell it today you would earn a total of 541,808 from holding Hanwha Solutions or generate 33.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.08% |
Values | Daily Returns |
Hanwha Solutions vs. Dow Jones Industrial
Performance |
Timeline |
Hanwha Solutions and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Hanwha Solutions
Pair trading matchups for Hanwha Solutions
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hanwha Solutions and Dow Jones
The main advantage of trading using opposite Hanwha Solutions and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Hanwha Solutions vs. Woori Technology Investment | Hanwha Solutions vs. Woorim Machinery Co | Hanwha Solutions vs. Seoam Machinery Industry | Hanwha Solutions vs. KEPCO Engineering Construction |
Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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