Correlation Between Hanil Chemical and Hansol Chemical
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Hansol Chemical 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 Hansol Chemical 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 Hansol Chemical Co, you can compare the effects of market volatilities on Hanil Chemical and Hansol Chemical 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 Hansol Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Hansol Chemical.
Diversification Opportunities for Hanil Chemical and Hansol Chemical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanil and Hansol is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Hansol Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Chemical 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 Hansol Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Chemical has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Hansol Chemical go up and down completely randomly.
Pair Corralation between Hanil Chemical and Hansol Chemical
Assuming the 90 days trading horizon Hanil Chemical Ind is expected to generate 0.86 times more return on investment than Hansol Chemical. However, Hanil Chemical Ind is 1.16 times less risky than Hansol Chemical. It trades about 0.09 of its potential returns per unit of risk. Hansol Chemical Co is currently generating about -0.09 per unit of risk. If you would invest 1,092,000 in Hanil Chemical Ind on September 14, 2024 and sell it today you would earn a total of 57,000 from holding Hanil Chemical Ind or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Hansol Chemical Co
Performance |
| Timeline |
| Hanil Chemical Ind |
| Hansol Chemical |
Hanil Chemical and Hansol Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Hansol Chemical
The main advantage of trading using opposite Hanil Chemical and Hansol Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Hansol Chemical 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 Hansol Chemical will offset losses from the drop in Hansol Chemical's long position.| Hanil Chemical vs. Polaris Office Corp | Hanil Chemical vs. Samhyun Steel Co | Hanil Chemical vs. Wonil Special Steel | Hanil Chemical vs. Innowireless Co |
| Hansol Chemical vs. Shinsegae Food | Hansol Chemical vs. Hyundai Engineering Plastics | Hansol Chemical vs. CKH Food Health | Hansol Chemical vs. PI Advanced Materials |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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