Correlation Between Hankook Furniture and THiRA UTECH
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and THiRA UTECH 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 THiRA UTECH 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 THiRA UTECH LTD, you can compare the effects of market volatilities on Hankook Furniture and THiRA UTECH 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 THiRA UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and THiRA UTECH.
Diversification Opportunities for Hankook Furniture and THiRA UTECH
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and THiRA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH 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 THiRA UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and THiRA UTECH go up and down completely randomly.
Pair Corralation between Hankook Furniture and THiRA UTECH
Assuming the 90 days trading horizon Hankook Furniture is expected to generate 49.11 times less return on investment than THiRA UTECH. But when comparing it to its historical volatility, Hankook Furniture Co is 4.08 times less risky than THiRA UTECH. It trades about 0.01 of its potential returns per unit of risk. THiRA UTECH LTD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 526,000 in THiRA UTECH LTD on November 3, 2024 and sell it today you would earn a total of 37,000 from holding THiRA UTECH LTD or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hankook Furniture Co vs. THiRA UTECH LTD
Performance |
| Timeline |
| Hankook Furniture |
| THiRA UTECH LTD |
Hankook Furniture and THiRA UTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and THiRA UTECH
The main advantage of trading using opposite Hankook Furniture and THiRA UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, THiRA UTECH 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 THiRA UTECH will offset losses from the drop in THiRA UTECH's long position.| Hankook Furniture vs. Alton Sports CoLtd | Hankook Furniture vs. Tway Air Co | Hankook Furniture vs. Next Entertainment World | Hankook Furniture vs. Korean Air Lines |
| THiRA UTECH vs. PNC Technologies co | THiRA UTECH vs. Lion Chemtech Co | THiRA UTECH vs. FNSTech Co | THiRA UTECH vs. Daiyang Metal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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