Correlation Between Automobile and Hancom
Can any of the company-specific risk be diversified away by investing in both Automobile and Hancom 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 Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Hancom Inc, you can compare the effects of market volatilities on Automobile and Hancom 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 Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Hancom.
Diversification Opportunities for Automobile and Hancom
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automobile and Hancom is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc 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 Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Automobile i.e., Automobile and Hancom go up and down completely randomly.
Pair Corralation between Automobile and Hancom
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Hancom. But the stock apears to be less risky and, when comparing its historical volatility, Automobile Pc is 1.37 times less risky than Hancom. The stock trades about -0.2 of its potential returns per unit of risk. The Hancom Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,911,000 in Hancom Inc on September 12, 2024 and sell it today you would earn a total of 289,000 from holding Hancom Inc or generate 15.12% 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. Hancom Inc
Performance |
| Timeline |
| Automobile Pc |
| Hancom Inc |
Automobile and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Hancom
The main advantage of trading using opposite Automobile and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| Automobile vs. Daou Data Corp | Automobile vs. Solution Advanced Technology | Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind |
| Hancom vs. Ssangyong Information Communication | Hancom vs. Automobile Pc | Hancom vs. PlayD Co | Hancom vs. Nable Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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