Correlation Between Han Kook and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both Han Kook and Namhwa Industrial 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 Han Kook and Namhwa Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Capital and Namhwa Industrial Co, you can compare the effects of market volatilities on Han Kook and Namhwa Industrial 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 Han Kook with a short position of Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Namhwa Industrial.
Diversification Opportunities for Han Kook and Namhwa Industrial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Han and Namhwa is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Capital and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial and Han Kook 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 Han Kook Capital are associated (or correlated) with Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of Han Kook i.e., Han Kook and Namhwa Industrial go up and down completely randomly.
Pair Corralation between Han Kook and Namhwa Industrial
Assuming the 90 days trading horizon Han Kook is expected to generate 1.69 times less return on investment than Namhwa Industrial. But when comparing it to its historical volatility, Han Kook Capital is 1.44 times less risky than Namhwa Industrial. It trades about 0.03 of its potential returns per unit of risk. Namhwa Industrial Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 528,000 in Namhwa Industrial Co on September 14, 2024 and sell it today you would earn a total of 6,000 from holding Namhwa Industrial Co or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Capital vs. Namhwa Industrial Co
Performance |
| Timeline |
| Han Kook Capital |
| Namhwa Industrial |
Han Kook and Namhwa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Namhwa Industrial
The main advantage of trading using opposite Han Kook and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.| Han Kook vs. CG Hi Tech | Han Kook vs. Samlip General Foods | Han Kook vs. Sam Yang Foods | Han Kook vs. Korea Shipbuilding Offshore |
| Namhwa Industrial vs. Wireless Power Amplifier | Namhwa Industrial vs. Alton Sports CoLtd | Namhwa Industrial vs. Mobileleader CoLtd | Namhwa Industrial vs. Kyeryong Construction Industrial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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