Correlation Between LEENO Industrial and Hanwha InvestmentSecuri

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

By analyzing existing cross correlation between LEENO Industrial and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on LEENO Industrial and Hanwha InvestmentSecuri 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 LEENO Industrial with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Hanwha InvestmentSecuri.

Diversification Opportunities for LEENO Industrial and Hanwha InvestmentSecuri

-0.53

Correlation Coefficient

LEENO Industrial  Hanwha InvestmentSecuri

Excellent diversification

The 3 months correlation between LEENO and Hanwha is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and LEENO Industrial 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 LEENO Industrial are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Hanwha InvestmentSecuri go up and down completely randomly.

Pair Corralation between LEENO Industrial and Hanwha InvestmentSecuri

Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.54 times more return on investment than Hanwha InvestmentSecuri. However, LEENO Industrial is 1.85 times less risky than Hanwha InvestmentSecuri. It trades about 0.13 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.04 per unit of risk. If you would invest  17,782,000  in LEENO Industrial on October 25, 2024 and sell it today you would earn a total of  4,168,000  from holding LEENO Industrial or generate 23.44% return on investment over 90 days.

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

LEENO Industrial  vs.  Hanwha InvestmentSecurities Co

LEENO Industrial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LEENO Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LEENO Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Hanwha InvestmentSecuri

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanwha InvestmentSecurities Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hanwha InvestmentSecuri sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LEENO Industrial and Hanwha InvestmentSecuri

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

The idea behind LEENO Industrial and Hanwha InvestmentSecurities 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.