Correlation Between Hankook Furniture and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on Hankook Furniture and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Kaonmedia.
Diversification Opportunities for Hankook Furniture and Kaonmedia
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and Kaonmedia is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Kaonmedia go up and down completely randomly.
Pair Corralation between Hankook Furniture and Kaonmedia
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.5 times more return on investment than Kaonmedia. However, Hankook Furniture Co is 2.02 times less risky than Kaonmedia. It trades about 0.05 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.12 per unit of risk. If you would invest 401,000 in Hankook Furniture Co on November 2, 2024 and sell it today you would earn a total of 2,000 from holding Hankook Furniture Co or generate 0.5% 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. Kaonmedia Co
Performance |
| Timeline |
| Hankook Furniture |
| Kaonmedia |
Hankook Furniture and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Kaonmedia
The main advantage of trading using opposite Hankook Furniture and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Hankook Furniture vs. Display Tech Co | Hankook Furniture vs. Samyang Foods Co | Hankook Furniture vs. CJ Seafood Corp | Hankook Furniture vs. Dongbu Insurance Co |
| Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. SK Hynix | Kaonmedia vs. HMM 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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