Correlation Between Hanil Chemical and Automobile
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Hanil Chemical and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Automobile.
Diversification Opportunities for Hanil Chemical and Automobile
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanil and Automobile is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Automobile go up and down completely randomly.
Pair Corralation between Hanil Chemical and Automobile
Assuming the 90 days trading horizon Hanil Chemical Ind is expected to generate 0.61 times more return on investment than Automobile. However, Hanil Chemical Ind is 1.64 times less risky than Automobile. It trades about -0.09 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.23 per unit of risk. If you would invest 1,147,921 in Hanil Chemical Ind on October 14, 2024 and sell it today you would lose (21,921) from holding Hanil Chemical Ind or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Automobile Pc
Performance |
| Timeline |
| Hanil Chemical Ind |
| Automobile Pc |
Hanil Chemical and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Automobile
The main advantage of trading using opposite Hanil Chemical and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Hanil Chemical vs. DAEDUCK ELECTRONICS CoLtd | Hanil Chemical vs. Genie Music | Hanil Chemical vs. Korea Information Communications | Hanil Chemical vs. Hotel Shilla Co |
| Automobile vs. Dongbang Transport Logistics | Automobile vs. Netmarble Games Corp | Automobile vs. Leaders Technology Investment | Automobile vs. TS Investment 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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