Correlation Between Winix and Hana Financial

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

By analyzing existing cross correlation between Winix Inc and Hana Financial 7, you can compare the effects of market volatilities on Winix and Hana Financial 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 Winix with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winix and Hana Financial.

Diversification Opportunities for Winix and Hana Financial

0.12

Correlation Coefficient

Winix  Hana Financial

Average diversification

The 3 months correlation between Winix and Hana is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Winix Inc and Hana Financial 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial 7 and Winix 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 Winix Inc are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial 7 has no effect on the direction of Winix i.e., Winix and Hana Financial go up and down completely randomly.

Pair Corralation between Winix and Hana Financial

Assuming the 90 days trading horizon Winix is expected to generate 2.9 times less return on investment than Hana Financial. But when comparing it to its historical volatility, Winix Inc is 1.06 times less risky than Hana Financial. It trades about 0.1 of its potential returns per unit of risk. Hana Financial 7 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  957,365  in Hana Financial 7 on October 20, 2024 and sell it today you would earn a total of  1,019,635  from holding Hana Financial 7 or generate 106.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Winix Inc  vs.  Hana Financial 7

Winix Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Winix Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winix sustained solid returns over the last few months and may actually be approaching a breakup point.

Hana Financial 7

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Financial 7 are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Winix and Hana Financial

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

The idea behind Winix Inc and Hana Financial 7 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.