Correlation Between Hana Financial and Q Capital

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

By analyzing existing cross correlation between Hana Financial and Q Capital Partners, you can compare the effects of market volatilities on Hana Financial and Q Capital 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 Q Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Q Capital.

Diversification Opportunities for Hana Financial and Q Capital

0.19

Correlation Coefficient

Hana Financial  Q Capital

Average diversification

The 3 months correlation between Hana and 016600 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Q Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Capital Partners 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 Q Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Capital Partners has no effect on the direction of Hana Financial i.e., Hana Financial and Q Capital go up and down completely randomly.

Pair Corralation between Hana Financial and Q Capital

Assuming the 90 days trading horizon Hana Financial is expected to under-perform the Q Capital. But the stock apears to be less risky and, when comparing its historical volatility, Hana Financial is 1.6 times less risky than Q Capital. The stock trades about -0.02 of its potential returns per unit of risk. The Q Capital Partners is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  25,600  in Q Capital Partners on December 2, 2024 and sell it today you would earn a total of  3,100  from holding Q Capital Partners or generate 12.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hana Financial  vs.  Q Capital Partners

Hana Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hana Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hana Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Q Capital Partners

Risk-Adjusted Performance

Modest

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

Pair Trading with Hana Financial and Q Capital

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

The idea behind Hana Financial and Q Capital Partners 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 Global Correlations module to find global opportunities by holding instruments from different markets.