Correlation Between Hansol Homedeco and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Hansol Homedeco and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on Hansol Homedeco and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Homedeco and Dongil Metal.
Diversification Opportunities for Hansol Homedeco and Dongil Metal
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hansol and Dongil is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and Dongil Metal go up and down completely randomly.
Pair Corralation between Hansol Homedeco and Dongil Metal
Assuming the 90 days trading horizon Hansol Homedeco Co is expected to generate 0.58 times more return on investment than Dongil Metal. However, Hansol Homedeco Co is 1.72 times less risky than Dongil Metal. It trades about -0.06 of its potential returns per unit of risk. Dongil Metal Co is currently generating about -0.06 per unit of risk. If you would invest 102,000 in Hansol Homedeco Co on September 24, 2024 and sell it today you would lose (36,800) from holding Hansol Homedeco Co or give up 36.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.52% |
| Values | Daily Returns |
Hansol Homedeco Co vs. Dongil Metal Co
Performance |
| Timeline |
| Hansol Homedeco |
| Dongil Metal |
Hansol Homedeco and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Homedeco and Dongil Metal
The main advantage of trading using opposite Hansol Homedeco and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Homedeco position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Wonbang Tech Co | Hansol Homedeco vs. Busan Industrial Co | Hansol Homedeco vs. Busan Ind |
| Dongil Metal vs. INSUN Environmental New | Dongil Metal vs. Finebesteel | Dongil Metal vs. Bookook Steel | Dongil Metal vs. J Steel 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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