Correlation Between Hanjin Transportation and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Hanjin Transportation and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Jeju Semiconductor.
Diversification Opportunities for Hanjin Transportation and Jeju Semiconductor
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanjin and Jeju is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Jeju Semiconductor
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 53.75 times less return on investment than Jeju Semiconductor. But when comparing it to its historical volatility, Hanjin Transportation Co is 2.6 times less risky than Jeju Semiconductor. It trades about 0.0 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 410,500 in Jeju Semiconductor Corp on October 13, 2024 and sell it today you would earn a total of 579,500 from holding Jeju Semiconductor Corp or generate 141.17% 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. Jeju Semiconductor Corp
Performance |
| Timeline |
| Hanjin Transportation |
| Jeju Semiconductor Corp |
Hanjin Transportation and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Jeju Semiconductor
The main advantage of trading using opposite Hanjin Transportation and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Hanjin Transportation vs. RFTech Co | Hanjin Transportation vs. BNK Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Samsung Life Insurance |
| Jeju Semiconductor vs. Playgram Co | Jeju Semiconductor vs. Hanjin Transportation Co | Jeju Semiconductor vs. PlayD Co | Jeju Semiconductor vs. Innowireless 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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