Correlation Between Automobile and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Automobile and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Handok Clean Tech, you can compare the effects of market volatilities on Automobile and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Handok Clean.
Diversification Opportunities for Automobile and Handok Clean
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Automobile and Handok is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Automobile i.e., Automobile and Handok Clean go up and down completely randomly.
Pair Corralation between Automobile and Handok Clean
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Handok Clean. In addition to that, Automobile is 1.13 times more volatile than Handok Clean Tech. It trades about -0.16 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about 0.1 per unit of volatility. If you would invest 603,000 in Handok Clean Tech on November 3, 2024 and sell it today you would earn a total of 21,000 from holding Handok Clean Tech or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Handok Clean Tech
Performance |
| Timeline |
| Automobile Pc |
| Handok Clean Tech |
Automobile and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Handok Clean
The main advantage of trading using opposite Automobile and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| Automobile vs. Duksan Hi Metal | Automobile vs. Daejung Chemicals Metals | Automobile vs. iNtRON Biotechnology | Automobile vs. Eagon Industrial Co |
| Handok Clean vs. Kukdo Chemical Co | Handok Clean vs. DB Financial Investment | Handok Clean vs. Coloray International Investment | Handok Clean vs. Daejung Chemicals Metals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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