Correlation Between Hanjin Transportation and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Ni Steel 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 Hanjin Transportation and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Ni Steel, you can compare the effects of market volatilities on Hanjin Transportation and Ni Steel 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 Hanjin Transportation with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Ni Steel.
Diversification Opportunities for Hanjin Transportation and Ni Steel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjin and 008260 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Ni Steel go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Ni Steel
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.91 times more return on investment than Ni Steel. However, Hanjin Transportation Co is 1.1 times less risky than Ni Steel. It trades about 0.01 of its potential returns per unit of risk. Ni Steel is currently generating about -0.06 per unit of risk. If you would invest 1,950,207 in Hanjin Transportation Co on August 29, 2024 and sell it today you would lose (52,207) from holding Hanjin Transportation Co or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Ni Steel
Performance |
| Timeline |
| Hanjin Transportation |
| Ni Steel |
Hanjin Transportation and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Ni Steel
The main advantage of trading using opposite Hanjin Transportation and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
| Ni Steel vs. Jeju Air Co | Ni Steel vs. Daejoo Electronic Materials | Ni Steel vs. TOPMATERIAL LTD | Ni Steel vs. LAKE MATERIALS LTD |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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