Correlation Between Hanil Chemical and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Kumho Industrial 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 Hanil Chemical and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Chemical Ind and Kumho Industrial Co, you can compare the effects of market volatilities on Hanil Chemical and Kumho Industrial 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 Hanil Chemical with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Kumho Industrial.
Diversification Opportunities for Hanil Chemical and Kumho Industrial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanil and Kumho is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial and Hanil Chemical 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 Hanil Chemical Ind are associated (or correlated) with Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Kumho Industrial go up and down completely randomly.
Pair Corralation between Hanil Chemical and Kumho Industrial
Assuming the 90 days trading horizon Hanil Chemical Ind is expected to generate 0.95 times more return on investment than Kumho Industrial. However, Hanil Chemical Ind is 1.05 times less risky than Kumho Industrial. It trades about 0.03 of its potential returns per unit of risk. Kumho Industrial Co is currently generating about -0.09 per unit of risk. If you would invest 1,096,150 in Hanil Chemical Ind on November 3, 2024 and sell it today you would earn a total of 46,850 from holding Hanil Chemical Ind or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Kumho Industrial Co
Performance |
| Timeline |
| Hanil Chemical Ind |
| Kumho Industrial |
Hanil Chemical and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Kumho Industrial
The main advantage of trading using opposite Hanil Chemical and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Kumho Industrial 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Hanil Chemical vs. Daechang Steel Co | Hanil Chemical vs. INSUN Environmental New | Hanil Chemical vs. Jahwa Electronics Co | Hanil Chemical vs. ABCO Electronics Co |
| Kumho Industrial vs. Histeel | Kumho Industrial vs. Shin Steel Co | Kumho Industrial vs. Cloud Air CoLtd | Kumho Industrial vs. Seoul Food Industrial |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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