Correlation Between Hanjin Transportation and Settlebank
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on Hanjin Transportation and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Settlebank.
Diversification Opportunities for Hanjin Transportation and Settlebank
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanjin and Settlebank is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Settlebank go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Settlebank
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.19 times more return on investment than Settlebank. However, Hanjin Transportation Co is 5.14 times less risky than Settlebank. It trades about 0.06 of its potential returns per unit of risk. Settlebank is currently generating about -0.1 per unit of risk. If you would invest 1,930,000 in Hanjin Transportation Co on November 7, 2024 and sell it today you would earn a total of 9,000 from holding Hanjin Transportation Co or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Settlebank
Performance |
| Timeline |
| Hanjin Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Settlebank |
Hanjin Transportation and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Settlebank
The main advantage of trading using opposite Hanjin Transportation and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Hanjin Transportation vs. Seoul Electronics Telecom | Hanjin Transportation vs. Jeju Bank | Hanjin Transportation vs. Nasmedia Co | Hanjin Transportation vs. Kaonmedia Co |
| Settlebank vs. Dongbang Transport Logistics | Settlebank vs. SKONEC Entertainment Co | Settlebank vs. Korea Petro Chemical | Settlebank vs. SH Energy Chemical |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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