Correlation Between Hanjin Transportation and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Hanjin Transportation and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Nable Communications.
Diversification Opportunities for Hanjin Transportation and Nable Communications
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanjin and Nable is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Nable Communications go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Nable Communications
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to under-perform the Nable Communications. In addition to that, Hanjin Transportation is 1.16 times more volatile than Nable Communications. It trades about -0.07 of its total potential returns per unit of risk. Nable Communications is currently generating about -0.02 per unit of volatility. If you would invest 698,000 in Nable Communications on November 3, 2024 and sell it today you would lose (57,000) from holding Nable Communications or give up 8.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Nable Communications
Performance |
| Timeline |
| Hanjin Transportation |
| Nable Communications |
Hanjin Transportation and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Nable Communications
The main advantage of trading using opposite Hanjin Transportation and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Hanjin Transportation vs. Korea Air Svc | Hanjin Transportation vs. Orbitech Co | Hanjin Transportation vs. SS TECH | Hanjin Transportation vs. Solution Advanced Technology |
| Nable Communications vs. Kukdong Oil Chemicals | Nable Communications vs. Youngbo Chemical Co | Nable Communications vs. Daejung Chemicals Metals | Nable Communications vs. SK Chemicals 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges |