Correlation Between Hankook Furniture and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Seojin Automotive 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 Seojin Automotive 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 Seojin Automotive CoLtd, you can compare the effects of market volatilities on Hankook Furniture and Seojin Automotive 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 Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Seojin Automotive.
Diversification Opportunities for Hankook Furniture and Seojin Automotive
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hankook and Seojin is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd 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 Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Seojin Automotive go up and down completely randomly.
Pair Corralation between Hankook Furniture and Seojin Automotive
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.64 times more return on investment than Seojin Automotive. However, Hankook Furniture Co is 1.57 times less risky than Seojin Automotive. It trades about 0.05 of its potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about 0.03 per unit of risk. If you would invest 392,551 in Hankook Furniture Co on October 23, 2024 and sell it today you would earn a total of 8,449 from holding Hankook Furniture Co or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Hankook Furniture |
| Seojin Automotive CoLtd |
Hankook Furniture and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Seojin Automotive
The main advantage of trading using opposite Hankook Furniture and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Hankook Furniture vs. KB Financial Group | Hankook Furniture vs. Shinhan Financial Group | Hankook Furniture vs. Hana Financial | Hankook Furniture vs. Woori Financial Group |
| Seojin Automotive vs. Dongbang Transport Logistics | Seojin Automotive vs. Hankook Furniture Co | Seojin Automotive vs. Green Cross Medical | Seojin Automotive vs. NICE Information Service |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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