Correlation Between Hankook Furniture and Osang Healthcare
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Osang Healthcare 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 Osang Healthcare 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 Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on Hankook Furniture and Osang Healthcare 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 Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Osang Healthcare.
Diversification Opportunities for Hankook Furniture and Osang Healthcare
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hankook and Osang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd 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 Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Osang Healthcare go up and down completely randomly.
Pair Corralation between Hankook Furniture and Osang Healthcare
Assuming the 90 days trading horizon Hankook Furniture is expected to generate 7.76 times less return on investment than Osang Healthcare. But when comparing it to its historical volatility, Hankook Furniture Co is 3.47 times less risky than Osang Healthcare. It trades about 0.05 of its potential returns per unit of risk. Osang Healthcare Co,Ltd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,135,000 in Osang Healthcare Co,Ltd on November 27, 2024 and sell it today you would earn a total of 383,000 from holding Osang Healthcare Co,Ltd or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Osang Healthcare Co,Ltd
Performance |
| Timeline |
| Hankook Furniture |
| Osang Healthcare Co,Ltd |
Hankook Furniture and Osang Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Osang Healthcare
The main advantage of trading using opposite Hankook Furniture and Osang Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Osang Healthcare 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 Osang Healthcare will offset losses from the drop in Osang Healthcare's long position.| Hankook Furniture vs. Husteel | Hankook Furniture vs. Insun Environment New | Hankook Furniture vs. Nable Communications | Hankook Furniture vs. Hironic Co |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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