Correlation Between Hansol Homedeco and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Kyeryong Construction 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 Kyeryong Construction 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 Kyeryong Construction Industrial, you can compare the effects of market volatilities on Hansol Homedeco and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Kyeryong Construction.
Diversification Opportunities for Hansol Homedeco and Kyeryong Construction
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hansol and Kyeryong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Kyeryong Construction
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to under-perform the Kyeryong Construction. But the stock apears to be less risky and, when comparing its historical volatility, Hansol Homedeco Co is 1.09 times less risky than Kyeryong Construction. The stock trades about -0.08 of its potential returns per unit of risk. The Kyeryong Construction Industrial is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,956,495 in Kyeryong Construction Industrial on September 19, 2024 and sell it today you would lose (647,495) from holding Kyeryong Construction Industrial or give up 33.09% 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. Kyeryong Construction Industri
Performance |
| Timeline |
| Hansol Homedeco |
| Kyeryong Construction |
Hansol Homedeco and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Kyeryong Construction
The main advantage of trading using opposite Hansol Homedeco and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction'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 |
| Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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