Correlation Between Han Kook and RaemongRaein
Can any of the company-specific risk be diversified away by investing in both Han Kook and RaemongRaein 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 RaemongRaein 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 RaemongRaein Co, you can compare the effects of market volatilities on Han Kook and RaemongRaein 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 RaemongRaein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and RaemongRaein.
Diversification Opportunities for Han Kook and RaemongRaein
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Han and RaemongRaein is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Capital and RaemongRaein Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaemongRaein 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 RaemongRaein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaemongRaein has no effect on the direction of Han Kook i.e., Han Kook and RaemongRaein go up and down completely randomly.
Pair Corralation between Han Kook and RaemongRaein
Assuming the 90 days trading horizon Han Kook Capital is expected to generate 0.2 times more return on investment than RaemongRaein. However, Han Kook Capital is 5.07 times less risky than RaemongRaein. It trades about -0.05 of its potential returns per unit of risk. RaemongRaein Co is currently generating about -0.05 per unit of risk. If you would invest 55,900 in Han Kook Capital on September 5, 2024 and sell it today you would lose (600.00) from holding Han Kook Capital or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Han Kook Capital vs. RaemongRaein Co
Performance |
| Timeline |
| Han Kook Capital |
| RaemongRaein |
Han Kook and RaemongRaein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and RaemongRaein
The main advantage of trading using opposite Han Kook and RaemongRaein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, RaemongRaein 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 RaemongRaein will offset losses from the drop in RaemongRaein's long position.The idea behind Han Kook Capital and RaemongRaein Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| RaemongRaein vs. Ssangyong Materials Corp | RaemongRaein vs. RF Materials Co | RaemongRaein vs. TOPMATERIAL LTD | RaemongRaein vs. Hyosung Advanced Materials |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |