Correlation Between Heungkuk Metaltech and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Hanjoo Light 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 Heungkuk Metaltech and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Hanjoo Light Metal, you can compare the effects of market volatilities on Heungkuk Metaltech and Hanjoo Light 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 Heungkuk Metaltech with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Hanjoo Light.
Diversification Opportunities for Heungkuk Metaltech and Hanjoo Light
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heungkuk and Hanjoo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Hanjoo Light go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Hanjoo Light
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.43 times more return on investment than Hanjoo Light. However, Heungkuk Metaltech CoLtd is 2.35 times less risky than Hanjoo Light. It trades about -0.01 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.1 per unit of risk. If you would invest 539,389 in Heungkuk Metaltech CoLtd on November 9, 2024 and sell it today you would lose (33,389) from holding Heungkuk Metaltech CoLtd or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Hanjoo Light Metal
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Hanjoo Light Metal |
Heungkuk Metaltech and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Hanjoo Light
The main advantage of trading using opposite Heungkuk Metaltech and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Hyundai Motor Co | Heungkuk Metaltech vs. Hyundai Motor |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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