Correlation Between Hanmi Financial and NEWMONT

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

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

Diversification Opportunities for Hanmi Financial and NEWMONT

0.69

Correlation Coefficient

Hanmi Financial  NEWMONT

Poor diversification

The 3 months correlation between Hanmi and NEWMONT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Financial and NEWMONT MNG P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT MNG P 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 NEWMONT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWMONT MNG P has no effect on the direction of Hanmi Financial i.e., Hanmi Financial and NEWMONT go up and down completely randomly.

Pair Corralation between Hanmi Financial and NEWMONT

Given the investment horizon of 90 days Hanmi Financial is expected to generate 87.15 times less return on investment than NEWMONT. But when comparing it to its historical volatility, Hanmi Financial is 36.17 times less risky than NEWMONT. It trades about 0.03 of its potential returns per unit of risk. NEWMONT MNG P is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,385  in NEWMONT MNG P on December 11, 2024 and sell it today you would earn a total of  240.00  from holding NEWMONT MNG P or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	84.99%
Values	Daily Returns

Hanmi Financial  vs.  NEWMONT MNG P

Hanmi Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanmi Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NEWMONT MNG P

Risk-Adjusted Performance

Weak

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

Pair Trading with Hanmi Financial and NEWMONT

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

The idea behind Hanmi Financial and NEWMONT MNG P 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.