A Pair Trade of Hanwha Aerospace and Hanwha Ocean
In this insight, we discuss a pair trade between Hanwha Aerospace (012450 KS) (go long) and Hanwha Ocean (042660 KS) (go short).
Hanwha Ocean faces bigger overhang risk of KDB continuing to sell additional shares of the company as compared to Hanwha Aerospace's rights offering shares dilution risk.
Hanwha Aerospace/Hanwha Ocean price ratio (5 year period) is near the 2 standard deviation (STD) mark which could suggest a reversion to the mean.
Photo Source: Sora Chatgpt
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