Correlation Between Hanjin Transportation and SCI Information
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Hanjin Transportation and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and SCI Information.
Diversification Opportunities for Hanjin Transportation and SCI Information
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanjin and SCI is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and SCI Information go up and down completely randomly.
Pair Corralation between Hanjin Transportation and SCI Information
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.39 times more return on investment than SCI Information. However, Hanjin Transportation Co is 2.57 times less risky than SCI Information. It trades about 0.26 of its potential returns per unit of risk. SCI Information Service is currently generating about 0.06 per unit of risk. If you would invest 1,862,700 in Hanjin Transportation Co on October 20, 2024 and sell it today you would earn a total of 72,300 from holding Hanjin Transportation Co or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. SCI Information Service
Performance |
| Timeline |
| Hanjin Transportation |
| SCI Information Service |
Hanjin Transportation and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and SCI Information
The main advantage of trading using opposite Hanjin Transportation and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| Hanjin Transportation vs. MetaLabs Co | Hanjin Transportation vs. Heungkuk Metaltech CoLtd | Hanjin Transportation vs. Formetal Co | Hanjin Transportation vs. Kisan Telecom Co |
| SCI Information vs. Shinsegae Food | SCI Information vs. Genie Music | SCI Information vs. Daeduck Electronics Co | SCI Information vs. ABCO Electronics 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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