Correlation Between Hanjin Transportation and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Hanjin Transportation and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and DAEDUCK ELECTRONICS.
Diversification Opportunities for Hanjin Transportation and DAEDUCK ELECTRONICS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanjin and DAEDUCK is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Hanjin Transportation and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 3.28 times less return on investment than DAEDUCK ELECTRONICS. But when comparing it to its historical volatility, Hanjin Transportation Co is 2.58 times less risky than DAEDUCK ELECTRONICS. It trades about 0.19 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 797,000 in DAEDUCK ELECTRONICS CoLtd on November 2, 2024 and sell it today you would earn a total of 44,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Hanjin Transportation |
| DAEDUCK ELECTRONICS CoLtd |
Hanjin Transportation and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Hanjin Transportation and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| Hanjin Transportation vs. Dongwoo Farm To | Hanjin Transportation vs. Vitzro Tech Co | Hanjin Transportation vs. Seoam Machinery Industry | Hanjin Transportation vs. Woori Technology |
| DAEDUCK ELECTRONICS vs. Korea Computer | DAEDUCK ELECTRONICS vs. Wave Electronics Co | DAEDUCK ELECTRONICS vs. CG Hi Tech | DAEDUCK ELECTRONICS vs. Daesung Hi Tech 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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