Correlation Between Hanmi Financial and Global Digital
Can any of the company-specific risk be diversified away by investing in both Hanmi Financial and Global Digital 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 Hanmi Financial and Global Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanmi Financial and Global Digital Soltn, you can compare the effects of market volatilities on Hanmi Financial and Global Digital 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 Hanmi Financial with a short position of Global Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Financial and Global Digital.
Diversification Opportunities for Hanmi Financial and Global Digital
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanmi and Global is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Financial and Global Digital Soltn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Digital Soltn and Hanmi 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 Hanmi Financial are associated (or correlated) with Global Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Digital Soltn has no effect on the direction of Hanmi Financial i.e., Hanmi Financial and Global Digital go up and down completely randomly.
Pair Corralation between Hanmi Financial and Global Digital
If you would invest 0.01 in Global Digital Soltn on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Global Digital Soltn or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Hanmi Financial vs. Global Digital Soltn
Performance |
Timeline |
Hanmi Financial |
Global Digital Soltn |
Hanmi Financial and Global Digital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanmi Financial and Global Digital
The main advantage of trading using opposite Hanmi Financial and Global Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Financial position performs unexpectedly, Global Digital 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 Global Digital will offset losses from the drop in Global Digital's long position.Hanmi Financial vs. OP Bancorp | Hanmi Financial vs. PCB Bancorp | Hanmi Financial vs. Heritage Commerce Corp | Hanmi Financial vs. Riverview Bancorp |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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