Correlation Between Hanjin Transportation and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Hanjin Transportation and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and SEOJEON ELECTRIC.
Diversification Opportunities for Hanjin Transportation and SEOJEON ELECTRIC
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjin and SEOJEON is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Hanjin Transportation and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 92.5 times less return on investment than SEOJEON ELECTRIC. But when comparing it to its historical volatility, Hanjin Transportation Co is 3.58 times less risky than SEOJEON ELECTRIC. It trades about 0.0 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 463,500 in SEOJEON ELECTRIC MACHINERY on October 14, 2024 and sell it today you would lose (52,500) from holding SEOJEON ELECTRIC MACHINERY or give up 11.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Hanjin Transportation |
| SEOJEON ELECTRIC MAC |
Hanjin Transportation and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and SEOJEON ELECTRIC
The main advantage of trading using opposite Hanjin Transportation and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC'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 |
| SEOJEON ELECTRIC vs. Youngsin Metal Industrial | SEOJEON ELECTRIC vs. Shinil Electronics Co | SEOJEON ELECTRIC vs. Daewoo Electronic Components | SEOJEON ELECTRIC vs. Kbi Metal 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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