Correlation Between Hansol Chemical and Daehan Synthetic
Can any of the company-specific risk be diversified away by investing in both Hansol Chemical and Daehan Synthetic 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 Chemical and Daehan Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansol Chemical Co and Daehan Synthetic Fiber, you can compare the effects of market volatilities on Hansol Chemical and Daehan Synthetic 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 Chemical with a short position of Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemical and Daehan Synthetic.
Diversification Opportunities for Hansol Chemical and Daehan Synthetic
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hansol and Daehan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemical Co and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber and Hansol Chemical 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 Chemical Co are associated (or correlated) with Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Hansol Chemical i.e., Hansol Chemical and Daehan Synthetic go up and down completely randomly.
Pair Corralation between Hansol Chemical and Daehan Synthetic
Assuming the 90 days trading horizon Hansol Chemical Co is expected to under-perform the Daehan Synthetic. In addition to that, Hansol Chemical is 5.22 times more volatile than Daehan Synthetic Fiber. It trades about -0.09 of its total potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about -0.19 per unit of volatility. If you would invest 11,430,000 in Daehan Synthetic Fiber on September 14, 2024 and sell it today you would lose (340,000) from holding Daehan Synthetic Fiber or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Chemical Co vs. Daehan Synthetic Fiber
Performance |
| Timeline |
| Hansol Chemical |
| Daehan Synthetic Fiber |
Hansol Chemical and Daehan Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Chemical and Daehan Synthetic
The main advantage of trading using opposite Hansol Chemical and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemical position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.| Hansol Chemical vs. Shinsegae Food | Hansol Chemical vs. Hyundai Engineering Plastics | Hansol Chemical vs. CKH Food Health | Hansol Chemical vs. PI Advanced Materials |
| Daehan Synthetic vs. Hana Technology Co | Daehan Synthetic vs. Cots Technology Co | Daehan Synthetic vs. Hanjoo Light Metal | Daehan Synthetic vs. Global Standard 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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