Correlation Between Hansol Chemica and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Hansol Chemica and Dongwon Metal 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 Hansol Chemica and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansol Chemica and Dongwon Metal Co, you can compare the effects of market volatilities on Hansol Chemica and Dongwon Metal 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 Hansol Chemica with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemica and Dongwon Metal.
Diversification Opportunities for Hansol Chemica and Dongwon Metal
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hansol and Dongwon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemica and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Hansol Chemica 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 Hansol Chemica are associated (or correlated) with Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Hansol Chemica i.e., Hansol Chemica and Dongwon Metal go up and down completely randomly.
Pair Corralation between Hansol Chemica and Dongwon Metal
Assuming the 90 days trading horizon Hansol Chemica is expected to under-perform the Dongwon Metal. In addition to that, Hansol Chemica is 1.4 times more volatile than Dongwon Metal Co. It trades about -0.36 of its total potential returns per unit of risk. Dongwon Metal Co is currently generating about -0.38 per unit of volatility. If you would invest 126,900 in Dongwon Metal Co on September 5, 2024 and sell it today you would lose (19,200) from holding Dongwon Metal Co or give up 15.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Chemica vs. Dongwon Metal Co
Performance |
| Timeline |
| Hansol Chemica |
| Dongwon Metal |
Hansol Chemica and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Chemica and Dongwon Metal
The main advantage of trading using opposite Hansol Chemica and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemica position performs unexpectedly, Dongwon Metal 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 Dongwon Metal will offset losses from the drop in Dongwon Metal's long position.| Hansol Chemica vs. Dongwon Metal Co | Hansol Chemica vs. Dongil Metal Co | Hansol Chemica vs. Organic Special Pet | Hansol Chemica vs. Lotte Chilsung Beverage |
| Dongwon Metal vs. Hwangkum Steel Technology | Dongwon Metal vs. Puloon Technology | Dongwon Metal vs. Heungkuk Metaltech CoLtd | Dongwon Metal vs. Digital Imaging Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |