Correlation Between Sajo Seafood and Hanwha Chemical
Can any of the company-specific risk be diversified away by investing in both Sajo Seafood and Hanwha Chemical 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 Hanwha Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sajo Seafood and Hanwha Chemical Corp, you can compare the effects of market volatilities on Sajo Seafood and Hanwha Chemical 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 Hanwha Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sajo Seafood and Hanwha Chemical.
Diversification Opportunities for Sajo Seafood and Hanwha Chemical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sajo and Hanwha is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sajo Seafood and Hanwha Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Chemical Corp 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 Hanwha Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Chemical Corp has no effect on the direction of Sajo Seafood i.e., Sajo Seafood and Hanwha Chemical go up and down completely randomly.
Pair Corralation between Sajo Seafood and Hanwha Chemical
Assuming the 90 days trading horizon Sajo Seafood is expected to generate 1.03 times more return on investment than Hanwha Chemical. However, Sajo Seafood is 1.03 times more volatile than Hanwha Chemical Corp. It trades about 0.01 of its potential returns per unit of risk. Hanwha Chemical Corp is currently generating about -0.05 per unit of risk. If you would invest 509,000 in Sajo Seafood on October 14, 2024 and sell it today you would lose (48,000) from holding Sajo Seafood or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.23% |
| Values | Daily Returns |
Sajo Seafood vs. Hanwha Chemical Corp
Performance |
| Timeline |
| Sajo Seafood |
| Hanwha Chemical Corp |
Sajo Seafood and Hanwha Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sajo Seafood and Hanwha Chemical
The main advantage of trading using opposite Sajo Seafood and Hanwha Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sajo Seafood position performs unexpectedly, Hanwha Chemical 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 Hanwha Chemical will offset losses from the drop in Hanwha Chemical's long position.| Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. KB Financial Group | Sajo Seafood vs. Shinhan Financial Group |
| Hanwha Chemical vs. CKH Food Health | Hanwha Chemical vs. Samsung Electronics Co | Hanwha Chemical vs. SungMoon Electronics Co | Hanwha Chemical vs. Sajo Seafood |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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