Correlation Between Hankook Furniture and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Hankook Furniture and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Eagle Veterinary.
Diversification Opportunities for Hankook Furniture and Eagle Veterinary
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and Eagle is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Hankook Furniture and Eagle Veterinary
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.66 times more return on investment than Eagle Veterinary. However, Hankook Furniture Co is 1.51 times less risky than Eagle Veterinary. It trades about 0.03 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.04 per unit of risk. If you would invest 359,891 in Hankook Furniture Co on October 16, 2024 and sell it today you would earn a total of 38,109 from holding Hankook Furniture Co or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Hankook Furniture |
| Eagle Veterinary Tec |
Hankook Furniture and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Eagle Veterinary
The main advantage of trading using opposite Hankook Furniture and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Hankook Furniture vs. CKH Food Health | Hankook Furniture vs. Chorokbaem Healthcare Co | Hankook Furniture vs. ChipsMedia | Hankook Furniture vs. LG Household Healthcare |
| Eagle Veterinary vs. CKH Food Health | Eagle Veterinary vs. Samlip General Foods | Eagle Veterinary vs. Daejung Chemicals Metals | Eagle Veterinary vs. Pyung Hwa Industrial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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