Correlation Between Korea Information and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both Korea Information and Hanil Chemical 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 Korea Information and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Hanil Chemical Ind, you can compare the effects of market volatilities on Korea Information and Hanil Chemical 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 Korea Information with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Hanil Chemical.
Diversification Opportunities for Korea Information and Hanil Chemical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Hanil is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and Korea Information 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 Korea Information Communications are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of Korea Information i.e., Korea Information and Hanil Chemical go up and down completely randomly.
Pair Corralation between Korea Information and Hanil Chemical
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 0.92 times more return on investment than Hanil Chemical. However, Korea Information Communications is 1.08 times less risky than Hanil Chemical. It trades about 0.12 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about -0.36 per unit of risk. If you would invest 780,000 in Korea Information Communications on October 28, 2024 and sell it today you would earn a total of 16,000 from holding Korea Information Communications or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Hanil Chemical Ind
Performance |
| Timeline |
| Korea Information |
| Hanil Chemical Ind |
Korea Information and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Hanil Chemical
The main advantage of trading using opposite Korea Information and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| Korea Information vs. Settlebank | Korea Information vs. Digital Multimedia Technology | Korea Information vs. BNK Financial Group | Korea Information vs. Korean Reinsurance Co |
| Hanil Chemical vs. Union Materials Corp | Hanil Chemical vs. Daechang Steel Co | Hanil Chemical vs. Ecoplastic | Hanil Chemical vs. Hyundai Engineering Plastics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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