Correlation Between Hanjin Transportation and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Hanjin Transportation and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Kukil Metal.
Diversification Opportunities for Hanjin Transportation and Kukil Metal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanjin and Kukil is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Kukil Metal go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Kukil Metal
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to under-perform the Kukil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Hanjin Transportation Co is 1.54 times less risky than Kukil Metal. The stock trades about -0.07 of its potential returns per unit of risk. The Kukil Metal Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 242,209 in Kukil Metal Co on November 3, 2024 and sell it today you would lose (64,909) from holding Kukil Metal Co or give up 26.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Kukil Metal Co
Performance |
| Timeline |
| Hanjin Transportation |
| Kukil Metal |
Hanjin Transportation and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Kukil Metal
The main advantage of trading using opposite Hanjin Transportation and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Hanjin Transportation vs. Korea Air Svc | Hanjin Transportation vs. Orbitech Co | Hanjin Transportation vs. SS TECH | Hanjin Transportation vs. Solution Advanced Technology |
| Kukil Metal vs. KG Eco Technology | Kukil Metal vs. iNtRON Biotechnology | Kukil Metal vs. GS Retail Co | Kukil Metal vs. Ilji Technology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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