Correlation Between Hana Financial and Handok Clean

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

By analyzing existing cross correlation between Hana Financial 7 and Handok Clean Tech, you can compare the effects of market volatilities on Hana Financial and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Handok Clean.

Diversification Opportunities for Hana Financial and Handok Clean

0.0

Correlation Coefficient

Hana Financial  Handok Clean

Pay attention - limited upside

The 3 months correlation between Hana and Handok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial 7 and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean 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 7 are associated (or correlated) with Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Hana Financial i.e., Hana Financial and Handok Clean go up and down completely randomly.

Pair Corralation between Hana Financial and Handok Clean

If you would invest (100.00) in Hana Financial 7 on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Hana Financial 7 or generate -100.0% return on investment over 90 days.

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

Hana Financial 7  vs.  Handok Clean Tech

Hana Financial 7

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Hana Financial 7 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.

Handok Clean Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Handok Clean Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Handok Clean 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 Handok Clean

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

The idea behind Hana Financial 7 and Handok Clean Tech 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.