Correlation Between Hanjin Transportation and Itcen
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Itcen 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 Itcen 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 Itcen Co, you can compare the effects of market volatilities on Hanjin Transportation and Itcen 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 Itcen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Itcen.
Diversification Opportunities for Hanjin Transportation and Itcen
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjin and Itcen is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen 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 Itcen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Itcen go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Itcen
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 129.5 times less return on investment than Itcen. But when comparing it to its historical volatility, Hanjin Transportation Co is 2.55 times less risky than Itcen. It trades about 0.0 of its potential returns per unit of risk. Itcen Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 524,000 in Itcen Co on October 14, 2024 and sell it today you would earn a total of 12,000 from holding Itcen Co or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Itcen Co
Performance |
| Timeline |
| Hanjin Transportation |
| Itcen |
Hanjin Transportation and Itcen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Itcen
The main advantage of trading using opposite Hanjin Transportation and Itcen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Itcen 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 Itcen will offset losses from the drop in Itcen'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 |
| Itcen vs. Pan Entertainment Co | Itcen vs. SAMG Entertainment Co | Itcen vs. Alton Sports CoLtd | Itcen vs. Daou Data Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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