Correlation Between HMM and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both HMM and Hanil 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 HMM and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and Hanil Chemical Ind, you can compare the effects of market volatilities on HMM and Hanil 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 HMM with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and Hanil Chemical.
Diversification Opportunities for HMM and Hanil Chemical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMM and Hanil is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and HMM 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 HMM Co are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of HMM i.e., HMM and Hanil Chemical go up and down completely randomly.
Pair Corralation between HMM and Hanil Chemical
Assuming the 90 days trading horizon HMM is expected to generate 1.92 times less return on investment than Hanil Chemical. But when comparing it to its historical volatility, HMM Co is 1.49 times less risky than Hanil Chemical. It trades about 0.18 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,005,551 in Hanil Chemical Ind on October 9, 2024 and sell it today you would earn a total of 121,449 from holding Hanil Chemical Ind or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. Hanil Chemical Ind
Performance |
| Timeline |
| HMM Co |
| Hanil Chemical Ind |
HMM and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and Hanil Chemical
The main advantage of trading using opposite HMM and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, Hanil 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| HMM vs. Shinhan Inverse Copper | HMM vs. SBI Investment KOREA | HMM vs. Youngsin Metal Industrial | HMM vs. Stic Investments |
| Hanil Chemical vs. LG Chemicals | Hanil Chemical vs. POSCO Holdings | Hanil Chemical vs. Hanwha Solutions | Hanil Chemical vs. Lotte Chemical 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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