Correlation Between Hansol Homedeco and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Korea Alcohol 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 Alcohol 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 Alcohol Industrial, you can compare the effects of market volatilities on Hansol Homedeco and Korea Alcohol 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 Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Korea Alcohol.
Diversification Opportunities for Hansol Homedeco and Korea Alcohol
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hansol and Korea is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Korea Alcohol go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Korea Alcohol
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to generate 1.23 times more return on investment than Korea Alcohol. However, Hansol Homedeco is 1.23 times more volatile than Korea Alcohol Industrial. It trades about -0.01 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.05 per unit of risk. If you would invest 76,400 in Hansol Homedeco Co on October 12, 2024 and sell it today you would lose (4,000) from holding Hansol Homedeco Co or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Hansol Homedeco |
| Korea Alcohol Industrial |
Hansol Homedeco and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Korea Alcohol
The main advantage of trading using opposite Hansol Homedeco and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Korea Alcohol 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 Alcohol will offset losses from the drop in Korea Alcohol's long position.| Hansol Homedeco vs. PI Advanced Materials | Hansol Homedeco vs. Hanjoo Light Metal | Hansol Homedeco vs. Lake Materials Co | Hansol Homedeco vs. Heungkuk Metaltech CoLtd |
| Korea Alcohol vs. Samji Electronics Co | Korea Alcohol vs. GS Engineering Construction | Korea Alcohol vs. Hansol Homedeco Co | Korea Alcohol vs. Polaris Office Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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