Correlation Between Dongbang Transport and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Hanjin Transportation 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 Dongbang Transport and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Hanjin Transportation Co, you can compare the effects of market volatilities on Dongbang Transport and Hanjin Transportation 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 Dongbang Transport with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Hanjin Transportation.
Diversification Opportunities for Dongbang Transport and Hanjin Transportation
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbang and Hanjin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Dongbang Transport and Hanjin Transportation
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to under-perform the Hanjin Transportation. In addition to that, Dongbang Transport is 2.91 times more volatile than Hanjin Transportation Co. It trades about -0.05 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.18 per unit of volatility. If you would invest 1,908,000 in Hanjin Transportation Co on November 3, 2024 and sell it today you would earn a total of 31,000 from holding Hanjin Transportation Co or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Hanjin Transportation Co
Performance |
| Timeline |
| Dongbang Transport |
| Hanjin Transportation |
Dongbang Transport and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Hanjin Transportation
The main advantage of trading using opposite Dongbang Transport and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Dongbang Transport vs. YG Entertainment | Dongbang Transport vs. DC Media Co | Dongbang Transport vs. INFINITT Healthcare Co | Dongbang Transport vs. Next Entertainment World |
| Hanjin Transportation vs. KG Eco Technology | Hanjin Transportation vs. Infinitt Healthcare Co | Hanjin Transportation vs. SK Chemicals Co | Hanjin Transportation vs. Bosung Power Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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