Correlation Between Hansol Homedeco and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Korea Shipbuilding 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Hansol Homedeco and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Korea Shipbuilding.
Diversification Opportunities for Hansol Homedeco and Korea Shipbuilding
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hansol and Korea is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Korea Shipbuilding
Assuming the 90 days trading horizon Hansol Homedeco is expected to generate 52.17 times less return on investment than Korea Shipbuilding. But when comparing it to its historical volatility, Hansol Homedeco Co is 1.16 times less risky than Korea Shipbuilding. It trades about 0.0 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,150,000 in Korea Shipbuilding Offshore on October 26, 2024 and sell it today you would earn a total of 14,700,000 from holding Korea Shipbuilding Offshore or generate 180.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Hansol Homedeco |
| Korea Shipbuilding |
Hansol Homedeco and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Korea Shipbuilding
The main advantage of trading using opposite Hansol Homedeco and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Hansol Homedeco vs. Seoam Machinery Industry | Hansol Homedeco vs. Dongbang Ship Machinery | Hansol Homedeco vs. KEPCO Engineering Construction | Hansol Homedeco vs. Korea Alcohol Industrial |
| Korea Shipbuilding vs. Nature and Environment | Korea Shipbuilding vs. Daehan Steel | Korea Shipbuilding vs. Moonbae Steel | Korea Shipbuilding vs. BGF Retail Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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