Correlation Between Hansol Homedeco and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Hanmi Semiconductor 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 Hanmi Semiconductor 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 Hanmi Semiconductor Co, you can compare the effects of market volatilities on Hansol Homedeco and Hanmi Semiconductor 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 Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Hanmi Semiconductor.
Diversification Opportunities for Hansol Homedeco and Hanmi Semiconductor
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hansol and Hanmi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor 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 Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Hanmi Semiconductor
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to generate 1.27 times more return on investment than Hanmi Semiconductor. However, Hansol Homedeco is 1.27 times more volatile than Hanmi Semiconductor Co. It trades about -0.04 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about -0.18 per unit of risk. If you would invest 100,600 in Hansol Homedeco Co on November 27, 2024 and sell it today you would lose (4,800) from holding Hansol Homedeco Co or give up 4.77% 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. Hanmi Semiconductor Co
Performance |
| Timeline |
| Hansol Homedeco |
| Hanmi Semiconductor |
Hansol Homedeco and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Hanmi Semiconductor
The main advantage of trading using opposite Hansol Homedeco and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor'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 |
| Hanmi Semiconductor vs. Songwon Industrial Co | Hanmi Semiconductor vs. Cheryong Industrial CoLtd | Hanmi Semiconductor vs. Iljin Display | Hanmi Semiconductor vs. Formetal 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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