Correlation Between Hanjin Transportation and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Hanjin Transportation and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and DSC Investment.
Diversification Opportunities for Hanjin Transportation and DSC Investment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjin and DSC is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and DSC Investment go up and down completely randomly.
Pair Corralation between Hanjin Transportation and DSC Investment
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.72 times more return on investment than DSC Investment. However, Hanjin Transportation Co is 1.39 times less risky than DSC Investment. It trades about 0.5 of its potential returns per unit of risk. DSC Investment is currently generating about 0.01 per unit of risk. If you would invest 1,832,640 in Hanjin Transportation Co on October 13, 2024 and sell it today you would earn a total of 125,360 from holding Hanjin Transportation Co or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. DSC Investment
Performance |
| Timeline |
| Hanjin Transportation |
| DSC Investment |
Hanjin Transportation and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and DSC Investment
The main advantage of trading using opposite Hanjin Transportation and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment'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 |
| DSC Investment vs. Shinhan Inverse Silver | DSC Investment vs. Seoul Electronics Telecom | DSC Investment vs. Wireless Power Amplifier | DSC Investment vs. Ssangyong Information Communication |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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