Correlation Between Hannong Chemicals and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Dongil Technology 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 Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Dongil Technology, you can compare the effects of market volatilities on Hannong Chemicals and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Dongil Technology.
Diversification Opportunities for Hannong Chemicals and Dongil Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hannong and Dongil is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Dongil Technology go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Dongil Technology
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 2.06 times more return on investment than Dongil Technology. However, Hannong Chemicals is 2.06 times more volatile than Dongil Technology. It trades about 0.03 of its potential returns per unit of risk. Dongil Technology is currently generating about 0.01 per unit of risk. If you would invest 1,177,236 in Hannong Chemicals on August 29, 2024 and sell it today you would earn a total of 297,764 from holding Hannong Chemicals or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Dongil Technology
Performance |
| Timeline |
| Hannong Chemicals |
| Dongil Technology |
Hannong Chemicals and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Dongil Technology
The main advantage of trading using opposite Hannong Chemicals and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| Hannong Chemicals vs. AptaBio Therapeutics | Hannong Chemicals vs. Daewoo SBI SPAC | Hannong Chemicals vs. Dream Security co | Hannong Chemicals vs. Microfriend |
| Dongil Technology vs. Hannong Chemicals | Dongil Technology vs. Korea Petro Chemical | Dongil Technology vs. Korean Drug Co | Dongil Technology vs. Kukdong Oil 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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