Correlation Between Hanjin Transportation and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Cheryong Industrial 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 Cheryong Industrial 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 Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Hanjin Transportation and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Cheryong Industrial.
Diversification Opportunities for Hanjin Transportation and Cheryong Industrial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjin and Cheryong is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Cheryong Industrial
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 1.48 times less return on investment than Cheryong Industrial. But when comparing it to its historical volatility, Hanjin Transportation Co is 2.46 times less risky than Cheryong Industrial. It trades about 0.45 of its potential returns per unit of risk. Cheryong Industrial CoLtd is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 547,244 in Cheryong Industrial CoLtd on October 15, 2024 and sell it today you would earn a total of 47,756 from holding Cheryong Industrial CoLtd or generate 8.73% 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. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Hanjin Transportation |
| Cheryong Industrial CoLtd |
Hanjin Transportation and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Cheryong Industrial
The main advantage of trading using opposite Hanjin Transportation and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial'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 |
| Cheryong Industrial vs. Nam Hwa Construction | Cheryong Industrial vs. ENERGYMACHINERY KOREA CoLtd | Cheryong Industrial vs. Camus Engineering Construction | Cheryong Industrial vs. Hanjin Transportation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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