Correlation Between Hana Financial and PH Tech

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

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

Diversification Opportunities for Hana Financial and PH Tech

-0.01

Correlation Coefficient

Hana Financial  PH Tech

Good diversification

The 3 months correlation between Hana and 239890 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech 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 PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of Hana Financial i.e., Hana Financial and PH Tech go up and down completely randomly.

Pair Corralation between Hana Financial and PH Tech

Assuming the 90 days trading horizon Hana Financial is expected to generate 24.08 times less return on investment than PH Tech. But when comparing it to its historical volatility, Hana Financial is 1.73 times less risky than PH Tech. It trades about 0.03 of its potential returns per unit of risk. PH Tech Co is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  615,000  in PH Tech Co on October 10, 2024 and sell it today you would earn a total of  200,000  from holding PH Tech Co or generate 32.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Hana Financial  vs.  PH Tech Co

Hana Financial

Risk-Adjusted Performance

0 of 100

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.

PH Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PH Tech Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PH Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hana Financial and PH Tech

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

The idea behind Hana Financial and PH Tech 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.