Correlation Between Hanjin Transportation and Sang A
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Sang A 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 Sang A 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 Sang A Frontec CoLtd, you can compare the effects of market volatilities on Hanjin Transportation and Sang A 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 Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Sang A.
Diversification Opportunities for Hanjin Transportation and Sang A
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjin and Sang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec 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 Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Sang A go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Sang A
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.53 times more return on investment than Sang A. However, Hanjin Transportation Co is 1.89 times less risky than Sang A. It trades about 0.08 of its potential returns per unit of risk. Sang A Frontec CoLtd is currently generating about -0.09 per unit of risk. If you would invest 1,898,000 in Hanjin Transportation Co on September 27, 2024 and sell it today you would earn a total of 42,000 from holding Hanjin Transportation Co or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Sang A Frontec CoLtd
Performance |
| Timeline |
| Hanjin Transportation |
| Sang A Frontec |
Hanjin Transportation and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Sang A
The main advantage of trading using opposite Hanjin Transportation and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.| Hanjin Transportation vs. Lotte Data Communication | Hanjin Transportation vs. Osang Healthcare Co,Ltd | Hanjin Transportation vs. INFINITT Healthcare Co | Hanjin Transportation vs. LG Household Healthcare |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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