Correlation Between Playgram and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Playgram 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 Playgram and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and Hanjin Transportation Co, you can compare the effects of market volatilities on Playgram 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 Playgram with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and Hanjin Transportation.
Diversification Opportunities for Playgram and Hanjin Transportation
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playgram and Hanjin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Playgram 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 Playgram 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 Playgram 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 Playgram i.e., Playgram and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Playgram and Hanjin Transportation
Assuming the 90 days trading horizon Playgram Co is expected to generate 3.67 times more return on investment than Hanjin Transportation. However, Playgram is 3.67 times more volatile than Hanjin Transportation Co. It trades about 0.08 of its potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.08 per unit of risk. If you would invest 34,400 in Playgram Co on September 12, 2024 and sell it today you would earn a total of 2,300 from holding Playgram Co or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playgram Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Playgram |
| Hanjin Transportation |
Playgram and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and Hanjin Transportation
The main advantage of trading using opposite Playgram and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram 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.| Playgram vs. Seoul Electronics Telecom | Playgram vs. ECSTELECOM Co | Playgram vs. Samlip General Foods | Playgram vs. Sejong Telecom |
| Hanjin Transportation vs. Samsung Electronics Co | Hanjin Transportation vs. Samsung Electronics Co | Hanjin Transportation vs. SK Hynix | Hanjin Transportation vs. POSCO Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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