Correlation Between Automobile and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Automobile and Hansol Homedeco 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 Automobile and Hansol Homedeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Hansol Homedeco Co, you can compare the effects of market volatilities on Automobile and Hansol Homedeco 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 Automobile with a short position of Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Hansol Homedeco.
Diversification Opportunities for Automobile and Hansol Homedeco
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automobile and Hansol is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco and Automobile 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 Automobile Pc are associated (or correlated) with Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Automobile i.e., Automobile and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Automobile and Hansol Homedeco
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Hansol Homedeco. But the stock apears to be less risky and, when comparing its historical volatility, Automobile Pc is 3.64 times less risky than Hansol Homedeco. The stock trades about -0.07 of its potential returns per unit of risk. The Hansol Homedeco Co is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 64,300 in Hansol Homedeco Co on October 30, 2024 and sell it today you would earn a total of 43,200 from holding Hansol Homedeco Co or generate 67.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Hansol Homedeco Co
Performance |
| Timeline |
| Automobile Pc |
| Hansol Homedeco |
Automobile and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Hansol Homedeco
The main advantage of trading using opposite Automobile and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Automobile vs. Hana Materials | Automobile vs. Hyosung Advanced Materials | Automobile vs. INNOX Advanced Materials | Automobile vs. Chorokbaem Healthcare Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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