Correlation Between Hannong Chemicals and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Heungkuk Metaltech 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 Hannong Chemicals and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Hannong Chemicals and Heungkuk Metaltech 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 Hannong Chemicals with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Heungkuk Metaltech.
Diversification Opportunities for Hannong Chemicals and Heungkuk Metaltech
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hannong and Heungkuk is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Hannong Chemicals 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 Hannong Chemicals are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Heungkuk Metaltech
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 5.07 times less return on investment than Heungkuk Metaltech. In addition to that, Hannong Chemicals is 1.54 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.01 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.1 per unit of volatility. If you would invest 511,655 in Heungkuk Metaltech CoLtd on October 17, 2024 and sell it today you would earn a total of 17,345 from holding Heungkuk Metaltech CoLtd or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Hannong Chemicals |
| Heungkuk Metaltech CoLtd |
Hannong Chemicals and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Heungkuk Metaltech
The main advantage of trading using opposite Hannong Chemicals and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Hannong Chemicals vs. KCC Engineering Construction | Hannong Chemicals vs. Hanshin Construction Co | Hannong Chemicals vs. Dongbang Ship Machinery | Hannong Chemicals vs. GS Retail Co |
| Heungkuk Metaltech vs. Aprogen Healthcare Games | Heungkuk Metaltech vs. GS Engineering Construction | Heungkuk Metaltech vs. Miwon Chemicals Co | Heungkuk Metaltech vs. Hannong Chemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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