Correlation Between Hana Financial and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Daewon Media 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 Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Daewon Media Co, you can compare the effects of market volatilities on Hana Financial and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Daewon Media.
Diversification Opportunities for Hana Financial and Daewon Media
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hana and Daewon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Hana Financial i.e., Hana Financial and Daewon Media go up and down completely randomly.
Pair Corralation between Hana Financial and Daewon Media
Assuming the 90 days trading horizon Hana Financial is expected to generate 1.5 times more return on investment than Daewon Media. However, Hana Financial is 1.5 times more volatile than Daewon Media Co. It trades about -0.04 of its potential returns per unit of risk. Daewon Media Co is currently generating about -0.06 per unit of risk. If you would invest 6,109,212 in Hana Financial on September 23, 2024 and sell it today you would lose (429,212) from holding Hana Financial or give up 7.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hana Financial vs. Daewon Media Co
Performance |
Timeline |
Hana Financial |
Daewon Media |
Hana Financial and Daewon Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hana Financial and Daewon Media
The main advantage of trading using opposite Hana Financial and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.Hana Financial vs. KB Financial Group | Hana Financial vs. Shinhan Financial Group | Hana Financial vs. Hyundai Motor | Hana Financial vs. Hyundai Motor Co |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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