Correlation Between Hanil Iron and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Hanil Iron and Nable Communications 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 Hanil Iron and Nable Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Iron Steel and Nable Communications, you can compare the effects of market volatilities on Hanil Iron and Nable Communications 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 Hanil Iron with a short position of Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Nable Communications.
Diversification Opportunities for Hanil Iron and Nable Communications
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanil and Nable is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications and Hanil Iron 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 Hanil Iron Steel are associated (or correlated) with Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Hanil Iron i.e., Hanil Iron and Nable Communications go up and down completely randomly.
Pair Corralation between Hanil Iron and Nable Communications
Assuming the 90 days trading horizon Hanil Iron Steel is expected to generate 0.82 times more return on investment than Nable Communications. However, Hanil Iron Steel is 1.23 times less risky than Nable Communications. It trades about 0.05 of its potential returns per unit of risk. Nable Communications is currently generating about 0.0 per unit of risk. If you would invest 186,800 in Hanil Iron Steel on December 10, 2024 and sell it today you would earn a total of 2,100 from holding Hanil Iron Steel or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Iron Steel vs. Nable Communications
Performance |
| Timeline |
| Hanil Iron Steel |
| Nable Communications |
Hanil Iron and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and Nable Communications
The main advantage of trading using opposite Hanil Iron and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Hanil Iron vs. DoubleU Games Co | Hanil Iron vs. Industrial Bank | Hanil Iron vs. Formetal Co | Hanil Iron vs. Hyunwoo Industrial Co |
| Nable Communications vs. Hyunwoo Industrial Co | Nable Communications vs. Daejung Chemicals Metals | Nable Communications vs. Daedong Metals Co | Nable Communications vs. Aekyung Industrial Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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