Correlation Between HMM and Taewoong CoLtd
Can any of the company-specific risk be diversified away by investing in both HMM and Taewoong CoLtd 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 Taewoong CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and Taewoong CoLtd, you can compare the effects of market volatilities on HMM and Taewoong CoLtd 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 Taewoong CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and Taewoong CoLtd.
Diversification Opportunities for HMM and Taewoong CoLtd
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMM and Taewoong is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and Taewoong CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taewoong CoLtd 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 Taewoong CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taewoong CoLtd has no effect on the direction of HMM i.e., HMM and Taewoong CoLtd go up and down completely randomly.
Pair Corralation between HMM and Taewoong CoLtd
Assuming the 90 days trading horizon HMM is expected to generate 4.6 times less return on investment than Taewoong CoLtd. But when comparing it to its historical volatility, HMM Co is 1.2 times less risky than Taewoong CoLtd. It trades about 0.01 of its potential returns per unit of risk. Taewoong CoLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 930,000 in Taewoong CoLtd on September 3, 2024 and sell it today you would earn a total of 112,000 from holding Taewoong CoLtd or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. Taewoong CoLtd
Performance |
| Timeline |
| HMM Co |
| Taewoong CoLtd |
HMM and Taewoong CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and Taewoong CoLtd
The main advantage of trading using opposite HMM and Taewoong CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, Taewoong CoLtd 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 Taewoong CoLtd will offset losses from the drop in Taewoong CoLtd's long position.| HMM vs. Daeduck Electronics Co | HMM vs. DB Financial Investment | HMM vs. Shinil Electronics Co | HMM vs. Samyoung Electronics Co |
| Taewoong CoLtd vs. Samsung Electronics Co | Taewoong CoLtd vs. Samsung Electronics Co | Taewoong CoLtd vs. LG Energy Solution | Taewoong CoLtd 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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