Correlation Between Hannong Chemicals and SV Investment
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and SV Investment 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 SV Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and SV Investment, you can compare the effects of market volatilities on Hannong Chemicals and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and SV Investment.
Diversification Opportunities for Hannong Chemicals and SV Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hannong and 289080 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and SV Investment go up and down completely randomly.
Pair Corralation between Hannong Chemicals and SV Investment
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 1.88 times more return on investment than SV Investment. However, Hannong Chemicals is 1.88 times more volatile than SV Investment. It trades about 0.03 of its potential returns per unit of risk. SV Investment is currently generating about -0.03 per unit of risk. If you would invest 1,127,865 in Hannong Chemicals on October 30, 2024 and sell it today you would earn a total of 270,135 from holding Hannong Chemicals or generate 23.95% 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. SV Investment
Performance |
| Timeline |
| Hannong Chemicals |
| SV Investment |
Hannong Chemicals and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and SV Investment
The main advantage of trading using opposite Hannong Chemicals and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| Hannong Chemicals vs. PLAYWITH | Hannong Chemicals vs. Samick Musical Instruments | Hannong Chemicals vs. Iljin Display | Hannong Chemicals vs. Fine Besteel Co |
| SV Investment vs. Atinum Investment Co | SV Investment vs. SBI Investment KOREA | SV Investment vs. Busan Industrial Co | SV Investment vs. Busan Ind |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |