Correlation Between Hankook Furniture and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and DIGITAL CHOSUN 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 Hankook Furniture and DIGITAL CHOSUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankook Furniture Co and DIGITAL CHOSUN, you can compare the effects of market volatilities on Hankook Furniture and DIGITAL CHOSUN 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 Hankook Furniture with a short position of DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and DIGITAL CHOSUN.
Diversification Opportunities for Hankook Furniture and DIGITAL CHOSUN
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankook and DIGITAL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN and Hankook Furniture 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 Hankook Furniture Co are associated (or correlated) with DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Hankook Furniture and DIGITAL CHOSUN
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.51 times more return on investment than DIGITAL CHOSUN. However, Hankook Furniture Co is 1.97 times less risky than DIGITAL CHOSUN. It trades about 0.03 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.11 per unit of risk. If you would invest 398,828 in Hankook Furniture Co on October 14, 2024 and sell it today you would earn a total of 1,672 from holding Hankook Furniture Co or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Hankook Furniture |
| DIGITAL CHOSUN |
Hankook Furniture and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and DIGITAL CHOSUN
The main advantage of trading using opposite Hankook Furniture and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Hankook Furniture vs. AptaBio Therapeutics | Hankook Furniture vs. Cytogen | Hankook Furniture vs. Woori Technology Investment | Hankook Furniture vs. ABL Bio |
| DIGITAL CHOSUN vs. N2Tech Co | DIGITAL CHOSUN vs. Lion Chemtech Co | DIGITAL CHOSUN vs. Hankook Furniture Co | DIGITAL CHOSUN vs. A Tech Solution 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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