Correlation Between Hana Financial and NAU IB

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

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

Diversification Opportunities for Hana Financial and NAU IB

-0.39

Correlation Coefficient

Hana Financial  NAU IB

Very good diversification

The 3 months correlation between Hana and NAU is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and NAU IB Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAU IB Capital 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 NAU IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAU IB Capital has no effect on the direction of Hana Financial i.e., Hana Financial and NAU IB go up and down completely randomly.

Pair Corralation between Hana Financial and NAU IB

Assuming the 90 days trading horizon Hana Financial is expected to generate 0.25 times more return on investment than NAU IB. However, Hana Financial is 4.01 times less risky than NAU IB. It trades about 0.11 of its potential returns per unit of risk. NAU IB Capital is currently generating about -0.03 per unit of risk. If you would invest  5,730,080  in Hana Financial on December 23, 2024 and sell it today you would earn a total of  489,920  from holding Hana Financial or generate 8.55% return on investment over 90 days.

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

Hana Financial  vs.  NAU IB Capital

Hana Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Financial are ranked lower than 8 (%) 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.

NAU IB Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAU IB Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hana Financial and NAU IB

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

The idea behind Hana Financial and NAU IB Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .