Correlation Between Iljin Materials and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and Hanmi Semiconductor 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 Iljin Materials and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Materials Co and Hanmi Semiconductor Co, you can compare the effects of market volatilities on Iljin Materials and Hanmi Semiconductor 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 Iljin Materials with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and Hanmi Semiconductor.
Diversification Opportunities for Iljin Materials and Hanmi Semiconductor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iljin and Hanmi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and Iljin Materials 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 Iljin Materials Co are associated (or correlated) with Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of Iljin Materials i.e., Iljin Materials and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between Iljin Materials and Hanmi Semiconductor
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the Hanmi Semiconductor. In addition to that, Iljin Materials is 1.21 times more volatile than Hanmi Semiconductor Co. It trades about -0.6 of its total potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about -0.51 per unit of volatility. If you would invest 9,560,000 in Hanmi Semiconductor Co on September 4, 2024 and sell it today you would lose (2,330,000) from holding Hanmi Semiconductor Co or give up 24.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Materials Co vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| Iljin Materials |
| Hanmi Semiconductor |
Iljin Materials and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and Hanmi Semiconductor
The main advantage of trading using opposite Iljin Materials and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.| Iljin Materials vs. Next Entertainment World | Iljin Materials vs. Cube Entertainment | Iljin Materials vs. SM Entertainment Co | Iljin Materials vs. MediaZen |
| Hanmi Semiconductor vs. AptaBio Therapeutics | Hanmi Semiconductor vs. Daewoo SBI SPAC | Hanmi Semiconductor vs. Dream Security co | Hanmi Semiconductor vs. Microfriend |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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