Correlation Between GS Retail and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both GS Retail and Hanjin Transportation 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 Retail and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Hanjin Transportation Co, you can compare the effects of market volatilities on GS Retail and Hanjin Transportation 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 Retail with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Hanjin Transportation.
Diversification Opportunities for GS Retail and Hanjin Transportation
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 007070 and Hanjin is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and GS Retail 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 Retail Co are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of GS Retail i.e., GS Retail and Hanjin Transportation go up and down completely randomly.
Pair Corralation between GS Retail and Hanjin Transportation
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Hanjin Transportation. In addition to that, GS Retail is 2.94 times more volatile than Hanjin Transportation Co. It trades about -0.41 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.23 per unit of volatility. If you would invest 1,877,244 in Hanjin Transportation Co on October 24, 2024 and sell it today you would earn a total of 58,756 from holding Hanjin Transportation Co or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Retail Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| GS Retail |
| Hanjin Transportation |
GS Retail and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Hanjin Transportation
The main advantage of trading using opposite GS Retail and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| GS Retail vs. Korea Information Communications | GS Retail vs. Lotte Data Communication | GS Retail vs. Hanwha Life Insurance | GS Retail vs. Innowireless Co |
| Hanjin Transportation vs. Daewon Media Co | Hanjin Transportation vs. LG Household Healthcare | Hanjin Transportation vs. YG Entertainment | Hanjin Transportation vs. JYP Entertainment Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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