Correlation Between Hanjin Transportation and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Hanjin Transportation and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Hansol Homedeco.
Diversification Opportunities for Hanjin Transportation and Hansol Homedeco
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjin and Hansol is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Hansol Homedeco
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 1.21 times more return on investment than Hansol Homedeco. However, Hanjin Transportation is 1.21 times more volatile than Hansol Homedeco Co. It trades about 0.0 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.07 per unit of risk. If you would invest 2,094,305 in Hanjin Transportation Co on October 9, 2024 and sell it today you would lose (164,305) from holding Hanjin Transportation Co or give up 7.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Hanjin Transportation |
| Hansol Homedeco |
Hanjin Transportation and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Hansol Homedeco
The main advantage of trading using opposite Hanjin Transportation and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
| Hansol Homedeco vs. SS TECH | Hansol Homedeco vs. Aprogen Healthcare Games | Hansol Homedeco vs. Leaders Technology Investment | Hansol Homedeco vs. Korean Drug 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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