Correlation Between HMM and Insung Information
Can any of the company-specific risk be diversified away by investing in both HMM and Insung Information 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 Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and Insung Information Co, you can compare the effects of market volatilities on HMM and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and Insung Information.
Diversification Opportunities for HMM and Insung Information
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMM and Insung is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of HMM i.e., HMM and Insung Information go up and down completely randomly.
Pair Corralation between HMM and Insung Information
Assuming the 90 days trading horizon HMM Co is expected to generate 1.3 times more return on investment than Insung Information. However, HMM is 1.3 times more volatile than Insung Information Co. It trades about 0.11 of its potential returns per unit of risk. Insung Information Co is currently generating about 0.12 per unit of risk. If you would invest 1,817,000 in HMM Co on October 25, 2024 and sell it today you would earn a total of 100,000 from holding HMM Co or generate 5.5% 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. Insung Information Co
Performance |
| Timeline |
| HMM Co |
| Insung Information |
HMM and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and Insung Information
The main advantage of trading using opposite HMM and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| HMM vs. Songwon Industrial Co | HMM vs. Seah Steel Corp | HMM vs. Dong A Steel Technology | HMM vs. Lee Ku Industrial |
| Insung Information vs. Samsung Electronics Co | Insung Information vs. Samsung Electronics Co | Insung Information vs. SK Hynix | Insung Information vs. HMM Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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