Correlation Between Jeju Bank and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Hanmi Semiconductor 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 Jeju Bank and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Hanmi Semiconductor Co, you can compare the effects of market volatilities on Jeju Bank and Hanmi Semiconductor 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 Jeju Bank with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Hanmi Semiconductor.
Diversification Opportunities for Jeju Bank and Hanmi Semiconductor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jeju and Hanmi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and Jeju Bank 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 Jeju Bank are associated (or correlated) with Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of Jeju Bank i.e., Jeju Bank and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between Jeju Bank and Hanmi Semiconductor
Assuming the 90 days trading horizon Jeju Bank is expected to generate 0.52 times more return on investment than Hanmi Semiconductor. However, Jeju Bank is 1.91 times less risky than Hanmi Semiconductor. It trades about -0.24 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about -0.51 per unit of risk. If you would invest 845,000 in Jeju Bank on September 4, 2024 and sell it today you would lose (56,000) from holding Jeju Bank or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| Jeju Bank |
| Hanmi Semiconductor |
Jeju Bank and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Hanmi Semiconductor
The main advantage of trading using opposite Jeju Bank and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.| Jeju Bank vs. Wireless Power Amplifier | Jeju Bank vs. KG Eco Technology | Jeju Bank vs. Ilji Technology Co | Jeju Bank vs. Dong A Steel Technology |
| Hanmi Semiconductor vs. AptaBio Therapeutics | Hanmi Semiconductor vs. Daewoo SBI SPAC | Hanmi Semiconductor vs. Dream Security co | Hanmi Semiconductor 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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