Correlation Between Hanjin Transportation and Automobile
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Hanjin Transportation and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Automobile.
Diversification Opportunities for Hanjin Transportation and Automobile
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanjin and Automobile is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Automobile go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Automobile
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.42 times more return on investment than Automobile. However, Hanjin Transportation Co is 2.38 times less risky than Automobile. It trades about 0.02 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.04 per unit of risk. If you would invest 1,920,000 in Hanjin Transportation Co on September 25, 2024 and sell it today you would earn a total of 16,000 from holding Hanjin Transportation Co or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Automobile Pc
Performance |
| Timeline |
| Hanjin Transportation |
| Automobile Pc |
Hanjin Transportation and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Automobile
The main advantage of trading using opposite Hanjin Transportation and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Hanjin Transportation vs. Samhwa Paint Industrial | Hanjin Transportation vs. Cheryong Industrial CoLtd | Hanjin Transportation vs. LEENO Industrial | Hanjin Transportation vs. PJ Metal Co |
| Automobile vs. Woori Technology Investment | Automobile vs. Samsung Card Co | Automobile vs. Korea Real Estate | Automobile vs. CHOROKBAEM PANY 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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