Correlation Between Hanwha Life and Hanil Vacuum

Can any of the company-specific risk be diversified away by investing in both Hanwha Life and Hanil Vacuum 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 Hanwha Life and Hanil Vacuum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanwha Life Insurance and Hanil Vacuum Co, you can compare the effects of market volatilities on Hanwha Life and Hanil Vacuum 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 Hanwha Life with a short position of Hanil Vacuum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Life and Hanil Vacuum.

Diversification Opportunities for Hanwha Life and Hanil Vacuum

0.0

Correlation Coefficient

Hanwha Life  Hanil Vacuum

Pay attention - limited upside

The 3 months correlation between Hanwha and Hanil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Life Insurance and Hanil Vacuum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Vacuum and Hanwha Life 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 Hanwha Life Insurance are associated (or correlated) with Hanil Vacuum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Vacuum has no effect on the direction of Hanwha Life i.e., Hanwha Life and Hanil Vacuum go up and down completely randomly.

Pair Corralation between Hanwha Life and Hanil Vacuum

If you would invest  254,500  in Hanwha Life Insurance on December 24, 2024 and sell it today you would earn a total of  5,500  from holding Hanwha Life Insurance or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hanwha Life Insurance  vs.  Hanil Vacuum Co

Hanwha Life Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanwha Life Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hanwha Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hanil Vacuum

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Hanwha Life and Hanil Vacuum

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

The idea behind Hanwha Life Insurance and Hanil Vacuum 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.