Correlation Between Daehan Synthetic and Hancom

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Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and Hancom 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 Daehan Synthetic and Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and Hancom Inc, you can compare the effects of market volatilities on Daehan Synthetic and Hancom 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 Daehan Synthetic with a short position of Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and Hancom.

Diversification Opportunities for Daehan Synthetic and Hancom

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Daehan and Hancom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and Hancom go up and down completely randomly.

Pair Corralation between Daehan Synthetic and Hancom

If you would invest (100.00) in Hancom Inc on September 6, 2024 and sell it today you would earn a total of  100.00  from holding Hancom Inc or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Daehan Synthetic Fiber  vs.  Hancom Inc

 Performance 
       Timeline  
Daehan Synthetic Fiber 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Daehan Synthetic Fiber are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daehan Synthetic sustained solid returns over the last few months and may actually be approaching a breakup point.
Hancom Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days Hancom Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hancom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Daehan Synthetic and Hancom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Daehan Synthetic and Hancom

The main advantage of trading using opposite Daehan Synthetic and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.
The idea behind Daehan Synthetic Fiber and Hancom Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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