Correlation Between Hana Financial and Automobile

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

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

Diversification Opportunities for Hana Financial and Automobile

-0.82

Correlation Coefficient

Hana Financial  Automobile

Pay attention - limited upside

The 3 months correlation between Hana and Automobile is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Hana Financial 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 Hana Financial are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Hana Financial i.e., Hana Financial and Automobile go up and down completely randomly.

Pair Corralation between Hana Financial and Automobile

Assuming the 90 days trading horizon Hana Financial is expected to generate 0.86 times more return on investment than Automobile. However, Hana Financial is 1.16 times less risky than Automobile. It trades about 0.13 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.18 per unit of risk. If you would invest  5,662,096  in Hana Financial on December 25, 2024 and sell it today you would earn a total of  597,904  from holding Hana Financial or generate 10.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.25%
Values	Daily Returns

Hana Financial  vs.  Automobile Pc

Hana Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Automobile Pc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Automobile Pc 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.

Pair Trading with Hana Financial and Automobile

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

The idea behind Hana Financial and Automobile Pc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.