Correlation Between Hanjin Transportation and Global Standard
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on Hanjin Transportation and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Global Standard.
Diversification Opportunities for Hanjin Transportation and Global Standard
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjin and Global is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Global Standard go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Global Standard
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to under-perform the Global Standard. But the stock apears to be less risky and, when comparing its historical volatility, Hanjin Transportation Co is 2.6 times less risky than Global Standard. The stock trades about -0.01 of its potential returns per unit of risk. The Global Standard Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,526,000 in Global Standard Technology on August 29, 2024 and sell it today you would earn a total of 46,000 from holding Global Standard Technology or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Global Standard Technology
Performance |
| Timeline |
| Hanjin Transportation |
| Global Standard Tech |
Hanjin Transportation and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Global Standard
The main advantage of trading using opposite Hanjin Transportation and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
| Global Standard vs. Korea Real Estate | Global Standard vs. Korea Ratings Co | Global Standard vs. IQuest Co | Global Standard vs. Wonbang Tech 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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