Correlation Between Hansol Homedeco and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Youngsin Metal 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 Hansol Homedeco and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansol Homedeco Co and Youngsin Metal Industrial, you can compare the effects of market volatilities on Hansol Homedeco and Youngsin Metal 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 Hansol Homedeco with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Youngsin Metal.
Diversification Opportunities for Hansol Homedeco and Youngsin Metal
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hansol and Youngsin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Hansol Homedeco 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 Hansol Homedeco Co are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Youngsin Metal go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Youngsin Metal
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to under-perform the Youngsin Metal. But the stock apears to be less risky and, when comparing its historical volatility, Hansol Homedeco Co is 1.7 times less risky than Youngsin Metal. The stock trades about -0.06 of its potential returns per unit of risk. The Youngsin Metal Industrial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 275,500 in Youngsin Metal Industrial on September 19, 2024 and sell it today you would lose (16,500) from holding Youngsin Metal Industrial or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Hansol Homedeco |
| Youngsin Metal Industrial |
Hansol Homedeco and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Youngsin Metal
The main advantage of trading using opposite Hansol Homedeco and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. SK Hynix | Hansol Homedeco vs. POSCO Holdings |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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