Correlation Between Hana Financial and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Hana Financial and BGF Retail 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 BGF Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and BGF Retail Co, you can compare the effects of market volatilities on Hana Financial and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and BGF Retail.
Diversification Opportunities for Hana Financial and BGF Retail
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and BGF is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Hana Financial i.e., Hana Financial and BGF Retail go up and down completely randomly.
Pair Corralation between Hana Financial and BGF Retail
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.67 times more return on investment than BGF Retail. However, Hana Financial is 1.5 times less risky than BGF Retail. It trades about -0.2 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.17 per unit of risk. If you would invest 5,900,000 in Hana Financial on October 22, 2024 and sell it today you would lose (170,000) from holding Hana Financial or give up 2.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 94.74% |
Values | Daily Returns |
Hana Financial vs. BGF Retail Co
Performance |
Timeline |
Hana Financial |
BGF Retail |
Hana Financial and BGF Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hana Financial and BGF Retail
The main advantage of trading using opposite Hana Financial and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.Hana Financial vs. PJ Metal Co | Hana Financial vs. Youngsin Metal Industrial | Hana Financial vs. GS Retail Co | Hana Financial vs. Hanjoo Light Metal |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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