Correlation Between Sajo Seafood and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Sajo Seafood and Hanil Iron 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 Sajo Seafood and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sajo Seafood and Hanil Iron Steel, you can compare the effects of market volatilities on Sajo Seafood and Hanil Iron 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 Sajo Seafood with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sajo Seafood and Hanil Iron.
Diversification Opportunities for Sajo Seafood and Hanil Iron
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sajo and Hanil is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sajo Seafood and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Sajo Seafood 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 Sajo Seafood are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Sajo Seafood i.e., Sajo Seafood and Hanil Iron go up and down completely randomly.
Pair Corralation between Sajo Seafood and Hanil Iron
Assuming the 90 days trading horizon Sajo Seafood is expected to generate 9.62 times more return on investment than Hanil Iron. However, Sajo Seafood is 9.62 times more volatile than Hanil Iron Steel. It trades about 0.16 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about -0.34 per unit of risk. If you would invest 462,500 in Sajo Seafood on October 28, 2024 and sell it today you would earn a total of 89,500 from holding Sajo Seafood or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sajo Seafood vs. Hanil Iron Steel
Performance |
| Timeline |
| Sajo Seafood |
| Hanil Iron Steel |
Sajo Seafood and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sajo Seafood and Hanil Iron
The main advantage of trading using opposite Sajo Seafood and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sajo Seafood position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Sajo Seafood vs. Busan Industrial Co | Sajo Seafood vs. Busan Ind | Sajo Seafood vs. RPBio Inc | Sajo Seafood vs. Finebesteel |
| Hanil Iron vs. KB Financial Group | Hanil Iron vs. Shinhan Financial Group | Hanil Iron vs. Hana Financial | Hanil Iron 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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