Correlation Between Lee Ku and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Lee Ku and Hanjoo Light 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 Lee Ku and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lee Ku Industrial and Hanjoo Light Metal, you can compare the effects of market volatilities on Lee Ku and Hanjoo Light 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 Lee Ku with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Ku and Hanjoo Light.
Diversification Opportunities for Lee Ku and Hanjoo Light
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lee and Hanjoo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lee Ku Industrial and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and Lee Ku 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 Lee Ku Industrial are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Lee Ku i.e., Lee Ku and Hanjoo Light go up and down completely randomly.
Pair Corralation between Lee Ku and Hanjoo Light
Assuming the 90 days trading horizon Lee Ku Industrial is expected to generate 1.03 times more return on investment than Hanjoo Light. However, Lee Ku is 1.03 times more volatile than Hanjoo Light Metal. It trades about 0.02 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.09 per unit of risk. If you would invest 400,500 in Lee Ku Industrial on November 7, 2024 and sell it today you would earn a total of 13,000 from holding Lee Ku Industrial or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lee Ku Industrial vs. Hanjoo Light Metal
Performance |
| Timeline |
| Lee Ku Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hanjoo Light Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lee Ku and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lee Ku and Hanjoo Light
The main advantage of trading using opposite Lee Ku and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lee Ku position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Lee Ku vs. Hyundai Home Shopping | Lee Ku vs. Narae Nanotech Corp | Lee Ku vs. Dongwoon Anatech Co | Lee Ku vs. Miwon Chemicals Co |
| Hanjoo Light vs. Hana Financial | Hanjoo Light vs. Hanwha Chemical Corp | Hanjoo Light vs. Settlebank | Hanjoo Light vs. Automobile Pc |
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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