Correlation Between Hannong Chemicals and Ubiquoss Holdings
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Ubiquoss Holdings 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 Ubiquoss Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Ubiquoss Holdings, you can compare the effects of market volatilities on Hannong Chemicals and Ubiquoss Holdings 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 Ubiquoss Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Ubiquoss Holdings.
Diversification Opportunities for Hannong Chemicals and Ubiquoss Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hannong and Ubiquoss is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Ubiquoss Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquoss Holdings 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 Ubiquoss Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquoss Holdings has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Ubiquoss Holdings go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Ubiquoss Holdings
Assuming the 90 days trading horizon Hannong Chemicals is expected to under-perform the Ubiquoss Holdings. In addition to that, Hannong Chemicals is 3.22 times more volatile than Ubiquoss Holdings. It trades about -0.07 of its total potential returns per unit of risk. Ubiquoss Holdings is currently generating about 0.02 per unit of volatility. If you would invest 960,000 in Ubiquoss Holdings on September 15, 2024 and sell it today you would earn a total of 4,000 from holding Ubiquoss Holdings or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hannong Chemicals vs. Ubiquoss Holdings
Performance |
| Timeline |
| Hannong Chemicals |
| Ubiquoss Holdings |
Hannong Chemicals and Ubiquoss Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Ubiquoss Holdings
The main advantage of trading using opposite Hannong Chemicals and Ubiquoss Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Ubiquoss Holdings 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 Ubiquoss Holdings will offset losses from the drop in Ubiquoss Holdings' long position.| Hannong Chemicals vs. Lotte Data Communication | Hannong Chemicals vs. Korean Drug Co | Hannong Chemicals vs. People Technology | Hannong Chemicals vs. HB Technology TD |
| Ubiquoss Holdings vs. EBEST Investment Securities | Ubiquoss Holdings vs. Golden Bridge Investment | Ubiquoss Holdings vs. Hannong Chemicals | Ubiquoss Holdings vs. DB Financial Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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