Correlation Between Korea Information and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Korea Information and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Korea Information and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Hansol Homedeco.
Diversification Opportunities for Korea Information and Hansol Homedeco
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Hansol is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Korea Information i.e., Korea Information and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Korea Information and Hansol Homedeco
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 1.55 times more return on investment than Hansol Homedeco. However, Korea Information is 1.55 times more volatile than Hansol Homedeco Co. It trades about -0.02 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 1,145,000 in Korea Information Communications on September 24, 2024 and sell it today you would lose (363,000) from holding Korea Information Communications or give up 31.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Hansol Homedeco Co
Performance |
| Timeline |
| Korea Information |
| Hansol Homedeco |
Korea Information and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Hansol Homedeco
The main advantage of trading using opposite Korea Information and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Wonbang Tech Co | Hansol Homedeco vs. Busan Industrial Co | Hansol Homedeco vs. Busan Ind |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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