Correlation Between Korea Shipbuilding and Hanilcmt
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Hanilcmt 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 Korea Shipbuilding and Hanilcmt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Hanilcmt Co, you can compare the effects of market volatilities on Korea Shipbuilding and Hanilcmt 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 Korea Shipbuilding with a short position of Hanilcmt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Hanilcmt.
Diversification Opportunities for Korea Shipbuilding and Hanilcmt
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and Hanilcmt is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Hanilcmt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanilcmt and Korea Shipbuilding 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 Korea Shipbuilding Offshore are associated (or correlated) with Hanilcmt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanilcmt has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Hanilcmt go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Hanilcmt
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.41 times more return on investment than Hanilcmt. However, Korea Shipbuilding is 1.41 times more volatile than Hanilcmt Co. It trades about 0.13 of its potential returns per unit of risk. Hanilcmt Co is currently generating about 0.1 per unit of risk. If you would invest 19,390,000 in Korea Shipbuilding Offshore on September 12, 2024 and sell it today you would earn a total of 1,710,000 from holding Korea Shipbuilding Offshore or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Hanilcmt Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Hanilcmt |
Korea Shipbuilding and Hanilcmt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Hanilcmt
The main advantage of trading using opposite Korea Shipbuilding and Hanilcmt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Hanilcmt 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 Hanilcmt will offset losses from the drop in Hanilcmt's long position.| Korea Shipbuilding vs. Korea New Network | Korea Shipbuilding vs. Solution Advanced Technology | Korea Shipbuilding vs. Busan Industrial Co | Korea Shipbuilding vs. Busan Ind |
| Hanilcmt vs. Solution Advanced Technology | Hanilcmt vs. Korea Shipbuilding Offshore | Hanilcmt vs. Shinhan Financial Group | Hanilcmt vs. Settlebank |
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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