Correlation Between GS Engineering and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both GS Engineering 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 GS Engineering and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Hanmi Semiconductor Co, you can compare the effects of market volatilities on GS Engineering 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 GS Engineering with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Hanmi Semiconductor.
Diversification Opportunities for GS Engineering and Hanmi Semiconductor
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 006360 and Hanmi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and GS Engineering 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 GS Engineering Construction 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 GS Engineering i.e., GS Engineering and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between GS Engineering and Hanmi Semiconductor
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 0.74 times more return on investment than Hanmi Semiconductor. However, GS Engineering Construction is 1.35 times less risky than Hanmi Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about -0.23 per unit of risk. If you would invest 1,827,000 in GS Engineering Construction on August 27, 2024 and sell it today you would earn a total of 23,000 from holding GS Engineering Construction or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| GS Engineering Const |
| Hanmi Semiconductor |
GS Engineering and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Hanmi Semiconductor
The main advantage of trading using opposite GS Engineering and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering 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.| GS Engineering vs. Hanmi Semiconductor Co | GS Engineering vs. Netmarble Games Corp | GS Engineering vs. Kakao Games Corp | GS Engineering vs. Sam Yang Foods |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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