Correlation Between Hanmi Financial and T M

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

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

Diversification Opportunities for Hanmi Financial and T M

-0.64

Correlation Coefficient

Hanmi Financial  T M

Excellent diversification

The 3 months correlation between Hanmi and TMMI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Financial and T M M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T M M 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 T M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T M M has no effect on the direction of Hanmi Financial i.e., Hanmi Financial and T M go up and down completely randomly.

Pair Corralation between Hanmi Financial and T M

Given the investment horizon of 90 days Hanmi Financial is expected to generate 67.51 times less return on investment than T M. But when comparing it to its historical volatility, Hanmi Financial is 20.32 times less risky than T M. It trades about 0.02 of its potential returns per unit of risk. T M M is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.24  in T M M on September 28, 2024 and sell it today you would lose (1.87) from holding T M M or give up 83.48% of portfolio value over 90 days.

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

Hanmi Financial  vs.  T M M

Hanmi Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanmi Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Hanmi Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

T M M

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T M M are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, T M demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanmi Financial and T M

The main advantage of trading using opposite Hanmi Financial and T M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Financial position performs unexpectedly, T M 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 T M will offset losses from the drop in T M's long position.

The idea behind Hanmi Financial and T M M 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.