Correlation Between Hannong Chemicals and IC Technology
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and IC 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 IC 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 IC Technology Co, you can compare the effects of market volatilities on Hannong Chemicals and IC 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 IC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and IC Technology.
Diversification Opportunities for Hannong Chemicals and IC Technology
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hannong and 052860 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC 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 IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and IC Technology go up and down completely randomly.
Pair Corralation between Hannong Chemicals and IC Technology
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 1.11 times more return on investment than IC Technology. However, Hannong Chemicals is 1.11 times more volatile than IC Technology Co. It trades about 0.01 of its potential returns per unit of risk. IC Technology Co is currently generating about -0.01 per unit of risk. If you would invest 1,640,211 in Hannong Chemicals on September 14, 2024 and sell it today you would lose (232,211) from holding Hannong Chemicals or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Hannong Chemicals vs. IC Technology Co
Performance |
| Timeline |
| Hannong Chemicals |
| IC Technology |
Hannong Chemicals and IC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and IC Technology
The main advantage of trading using opposite Hannong Chemicals and IC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, IC 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 IC Technology will offset losses from the drop in IC Technology's long position.| Hannong Chemicals vs. Samsung Electronics Co | Hannong Chemicals vs. Samsung Electronics Co | Hannong Chemicals vs. SK Hynix | Hannong Chemicals vs. POSCO Holdings |
| IC Technology vs. Innowireless Co | IC Technology vs. KT Submarine Telecom | IC Technology vs. Netmarble Games Corp | IC Technology vs. Mgame 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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