Correlation Between Hannong Chemicals and Mirai Semiconductors
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Mirai Semiconductors 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 Mirai Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Mirai Semiconductors Co, you can compare the effects of market volatilities on Hannong Chemicals and Mirai Semiconductors 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 Mirai Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Mirai Semiconductors.
Diversification Opportunities for Hannong Chemicals and Mirai Semiconductors
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hannong and Mirai is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Mirai Semiconductors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirai Semiconductors 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 Mirai Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirai Semiconductors has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Mirai Semiconductors go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Mirai Semiconductors
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 1.75 times less return on investment than Mirai Semiconductors. But when comparing it to its historical volatility, Hannong Chemicals is 1.11 times less risky than Mirai Semiconductors. It trades about 0.11 of its potential returns per unit of risk. Mirai Semiconductors Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,090,000 in Mirai Semiconductors Co on October 12, 2024 and sell it today you would earn a total of 101,000 from holding Mirai Semiconductors Co or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Mirai Semiconductors Co
Performance |
| Timeline |
| Hannong Chemicals |
| Mirai Semiconductors |
Hannong Chemicals and Mirai Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Mirai Semiconductors
The main advantage of trading using opposite Hannong Chemicals and Mirai Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Mirai Semiconductors 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 Mirai Semiconductors will offset losses from the drop in Mirai Semiconductors' long position.| Hannong Chemicals vs. Narae Nanotech Corp | Hannong Chemicals vs. Hwangkum Steel Technology | Hannong Chemicals vs. Kbi Metal Co | Hannong Chemicals vs. Yura Tech Co |
| Mirai Semiconductors vs. Kg Chemical | Mirai Semiconductors vs. Hannong Chemicals | Mirai Semiconductors vs. SK Chemicals Co | Mirai Semiconductors vs. Kisan Telecom Co |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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