Correlation Between Hansol Homedeco and Homecast CoLtd
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Homecast CoLtd 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 Homecast CoLtd 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 Homecast CoLtd, you can compare the effects of market volatilities on Hansol Homedeco and Homecast CoLtd 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 Homecast CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Homecast CoLtd.
Diversification Opportunities for Hansol Homedeco and Homecast CoLtd
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hansol and Homecast is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Homecast CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homecast CoLtd 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 Homecast CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homecast CoLtd has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Homecast CoLtd go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Homecast CoLtd
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to generate 0.77 times more return on investment than Homecast CoLtd. However, Hansol Homedeco Co is 1.29 times less risky than Homecast CoLtd. It trades about 0.04 of its potential returns per unit of risk. Homecast CoLtd is currently generating about -0.1 per unit of risk. If you would invest 65,300 in Hansol Homedeco Co on September 20, 2024 and sell it today you would earn a total of 1,100 from holding Hansol Homedeco Co or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Homecast CoLtd
Performance |
| Timeline |
| Hansol Homedeco |
| Homecast CoLtd |
Hansol Homedeco and Homecast CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Homecast CoLtd
The main advantage of trading using opposite Hansol Homedeco and Homecast CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Homecast CoLtd 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 Homecast CoLtd will offset losses from the drop in Homecast CoLtd'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 |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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