Correlation Between Hanshin Construction and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction and Jeju Beer 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 Hanshin Construction and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Jeju Beer Co, you can compare the effects of market volatilities on Hanshin Construction and Jeju Beer 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 Hanshin Construction with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Jeju Beer.
Diversification Opportunities for Hanshin Construction and Jeju Beer
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanshin and Jeju is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and Hanshin Construction 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 Hanshin Construction Co are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Hanshin Construction i.e., Hanshin Construction and Jeju Beer go up and down completely randomly.
Pair Corralation between Hanshin Construction and Jeju Beer
Assuming the 90 days trading horizon Hanshin Construction Co is expected to generate 0.45 times more return on investment than Jeju Beer. However, Hanshin Construction Co is 2.21 times less risky than Jeju Beer. It trades about -0.01 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.02 per unit of risk. If you would invest 838,173 in Hanshin Construction Co on September 13, 2024 and sell it today you would lose (168,173) from holding Hanshin Construction Co or give up 20.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. Jeju Beer Co
Performance |
| Timeline |
| Hanshin Construction |
| Jeju Beer |
Hanshin Construction and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Jeju Beer
The main advantage of trading using opposite Hanshin Construction and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Hanshin Construction vs. Samsung Electronics Co | Hanshin Construction vs. Samsung Electronics Co | Hanshin Construction vs. SK Hynix | Hanshin Construction vs. POSCO Holdings |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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