Correlation Between Hana Materials and Haesung DS

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

By analyzing existing cross correlation between Hana Materials and Haesung DS Co, you can compare the effects of market volatilities on Hana Materials and Haesung DS 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 Materials with a short position of Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Haesung DS.

Diversification Opportunities for Hana Materials and Haesung DS

0.89

Correlation Coefficient

Hana Materials  Haesung DS

Very poor diversification

The 3 months correlation between Hana and Haesung is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS and Hana Materials 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 Materials are associated (or correlated) with Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of Hana Materials i.e., Hana Materials and Haesung DS go up and down completely randomly.

Pair Corralation between Hana Materials and Haesung DS

Assuming the 90 days trading horizon Hana Materials is expected to generate 1.06 times more return on investment than Haesung DS. However, Hana Materials is 1.06 times more volatile than Haesung DS Co. It trades about 0.16 of its potential returns per unit of risk. Haesung DS Co is currently generating about 0.16 per unit of risk. If you would invest  2,354,681  in Hana Materials on November 28, 2024 and sell it today you would earn a total of  960,319  from holding Hana Materials or generate 40.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.28%
Values	Daily Returns

Hana Materials  vs.  Haesung DS Co

Hana Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Materials are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Materials sustained solid returns over the last few months and may actually be approaching a breakup point.

Haesung DS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haesung DS Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Haesung DS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hana Materials and Haesung DS

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

The idea behind Hana Materials and Haesung DS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.