Correlation Between Hanmi Financial and BCULC

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

By analyzing existing cross correlation between Hanmi Financial and BCULC 35 15 FEB 29, you can compare the effects of market volatilities on Hanmi Financial and BCULC 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 BCULC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Financial and BCULC.

Diversification Opportunities for Hanmi Financial and BCULC

0.87

Correlation Coefficient

Hanmi Financial  BCULC

Very poor diversification

The 3 months correlation between Hanmi and BCULC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Financial and BCULC 35 15 FEB 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCULC 35 15 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 BCULC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCULC 35 15 has no effect on the direction of Hanmi Financial i.e., Hanmi Financial and BCULC go up and down completely randomly.

Pair Corralation between Hanmi Financial and BCULC

Given the investment horizon of 90 days Hanmi Financial is expected to generate 4.61 times more return on investment than BCULC. However, Hanmi Financial is 4.61 times more volatile than BCULC 35 15 FEB 29. It trades about 0.06 of its potential returns per unit of risk. BCULC 35 15 FEB 29 is currently generating about -0.09 per unit of risk. If you would invest  2,267  in Hanmi Financial on September 27, 2024 and sell it today you would earn a total of  120.00  from holding Hanmi Financial or generate 5.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	37.21%
Values	Daily Returns

Hanmi Financial  vs.  BCULC 35 15 FEB 29

Hanmi Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanmi Financial are ranked lower than 12 (%) 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.

BCULC 35 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCULC 35 15 FEB 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BCULC 35 15 FEB 29 investors.

Pair Trading with Hanmi Financial and BCULC

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

The idea behind Hanmi Financial and BCULC 35 15 FEB 29 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.