Correlation Between Hansol Chemical and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Hansol Chemical and TAEYANG 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 TAEYANG 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 TAEYANG, you can compare the effects of market volatilities on Hansol Chemical and TAEYANG 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 TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemical and TAEYANG.
Diversification Opportunities for Hansol Chemical and TAEYANG
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hansol and TAEYANG is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemical Co and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG 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 TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Hansol Chemical i.e., Hansol Chemical and TAEYANG go up and down completely randomly.
Pair Corralation between Hansol Chemical and TAEYANG
Assuming the 90 days trading horizon Hansol Chemical Co is expected to under-perform the TAEYANG. In addition to that, Hansol Chemical is 1.9 times more volatile than TAEYANG. It trades about -0.2 of its total potential returns per unit of risk. TAEYANG is currently generating about 0.12 per unit of volatility. If you would invest 591,286 in TAEYANG on October 1, 2024 and sell it today you would earn a total of 44,714 from holding TAEYANG or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Chemical Co vs. TAEYANG
Performance |
| Timeline |
| Hansol Chemical |
| TAEYANG |
Hansol Chemical and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Chemical and TAEYANG
The main advantage of trading using opposite Hansol Chemical and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemical position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| Hansol Chemical vs. Shinhan Inverse Silver | Hansol Chemical vs. Pan Entertainment Co | Hansol Chemical vs. JYP Entertainment Corp | Hansol Chemical vs. Daewon Media Co |
| TAEYANG vs. KB Financial Group | TAEYANG vs. Shinhan Financial Group | TAEYANG vs. Hana Financial | TAEYANG vs. Woori Financial Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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