Correlation Between Hanjin Transportation and FNSTech
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and FNSTech 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 FNSTech 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 FNSTech Co, you can compare the effects of market volatilities on Hanjin Transportation and FNSTech 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 FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and FNSTech.
Diversification Opportunities for Hanjin Transportation and FNSTech
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanjin and FNSTech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech 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 FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and FNSTech go up and down completely randomly.
Pair Corralation between Hanjin Transportation and FNSTech
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 1.81 times less return on investment than FNSTech. But when comparing it to its historical volatility, Hanjin Transportation Co is 5.11 times less risky than FNSTech. It trades about 0.49 of its potential returns per unit of risk. FNSTech Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 840,000 in FNSTech Co on October 14, 2024 and sell it today you would earn a total of 96,000 from holding FNSTech Co or generate 11.43% 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. FNSTech Co
Performance |
| Timeline |
| Hanjin Transportation |
| FNSTech |
Hanjin Transportation and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and FNSTech
The main advantage of trading using opposite Hanjin Transportation and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| Hanjin Transportation vs. Sangsin Energy Display | Hanjin Transportation vs. Display Tech Co | Hanjin Transportation vs. Dongil Metal Co | Hanjin Transportation vs. Hanjoo Light Metal |
| FNSTech vs. Lake Materials Co | FNSTech vs. Sejong Telecom | FNSTech vs. INNOX Advanced Materials | FNSTech vs. Kolon Plastics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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