Correlation Between Hanjin Transportation and Macromill Embrain
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Macromill Embrain 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 Macromill Embrain 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 Macromill Embrain Co, you can compare the effects of market volatilities on Hanjin Transportation and Macromill Embrain 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 Macromill Embrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Macromill Embrain.
Diversification Opportunities for Hanjin Transportation and Macromill Embrain
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanjin and Macromill is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Macromill Embrain Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macromill Embrain 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 Macromill Embrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macromill Embrain has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Macromill Embrain go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Macromill Embrain
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.69 times more return on investment than Macromill Embrain. However, Hanjin Transportation Co is 1.45 times less risky than Macromill Embrain. It trades about -0.01 of its potential returns per unit of risk. Macromill Embrain Co is currently generating about -0.09 per unit of risk. If you would invest 1,956,000 in Hanjin Transportation Co on September 3, 2024 and sell it today you would lose (67,000) from holding Hanjin Transportation Co or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Macromill Embrain Co
Performance |
| Timeline |
| Hanjin Transportation |
| Macromill Embrain |
Hanjin Transportation and Macromill Embrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Macromill Embrain
The main advantage of trading using opposite Hanjin Transportation and Macromill Embrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Macromill Embrain 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 Macromill Embrain will offset losses from the drop in Macromill Embrain's long position.| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
| Macromill Embrain vs. Stic Investments | Macromill Embrain vs. GS Retail Co | Macromill Embrain vs. Lindeman Asia Investment | Macromill Embrain vs. Polaris Office 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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