Correlation Between Hansol Homedeco and Korea Electric
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Korea Electric 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 Electric 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 Electric Power, you can compare the effects of market volatilities on Hansol Homedeco and Korea Electric 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 Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Korea Electric.
Diversification Opportunities for Hansol Homedeco and Korea Electric
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansol and Korea is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Korea Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electric Power 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 Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electric Power has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Korea Electric go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Korea Electric
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to under-perform the Korea Electric. In addition to that, Hansol Homedeco is 3.53 times more volatile than Korea Electric Power. It trades about -0.04 of its total potential returns per unit of risk. Korea Electric Power is currently generating about 0.22 per unit of volatility. If you would invest 2,105,000 in Korea Electric Power on November 27, 2024 and sell it today you would earn a total of 100,000 from holding Korea Electric Power or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Korea Electric Power
Performance |
| Timeline |
| Hansol Homedeco |
| Korea Electric Power |
Hansol Homedeco and Korea Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Korea Electric
The main advantage of trading using opposite Hansol Homedeco and Korea Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Korea Electric 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 Electric will offset losses from the drop in Korea Electric's long position.| Hansol Homedeco vs. Lake Materials Co | Hansol Homedeco vs. Union Materials Corp | Hansol Homedeco vs. CKH Food Health | Hansol Homedeco vs. PI Advanced Materials |
| Korea Electric vs. Lotte Non Life Insurance | Korea Electric vs. Seoyon Topmetal Co | Korea Electric vs. Samick Musical Instruments | Korea Electric vs. DB Insurance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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