Correlation Between Namhae Chemical and Hanilcmt
Can any of the company-specific risk be diversified away by investing in both Namhae Chemical and Hanilcmt 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 Namhae Chemical and Hanilcmt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhae Chemical and Hanilcmt Co, you can compare the effects of market volatilities on Namhae Chemical and Hanilcmt 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 Namhae Chemical with a short position of Hanilcmt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhae Chemical and Hanilcmt.
Diversification Opportunities for Namhae Chemical and Hanilcmt
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Namhae and Hanilcmt is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Namhae Chemical and Hanilcmt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanilcmt and Namhae Chemical 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 Namhae Chemical are associated (or correlated) with Hanilcmt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanilcmt has no effect on the direction of Namhae Chemical i.e., Namhae Chemical and Hanilcmt go up and down completely randomly.
Pair Corralation between Namhae Chemical and Hanilcmt
Assuming the 90 days trading horizon Namhae Chemical is expected to under-perform the Hanilcmt. But the stock apears to be less risky and, when comparing its historical volatility, Namhae Chemical is 1.83 times less risky than Hanilcmt. The stock trades about -0.07 of its potential returns per unit of risk. The Hanilcmt Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,191,901 in Hanilcmt Co on September 5, 2024 and sell it today you would earn a total of 274,099 from holding Hanilcmt Co or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhae Chemical vs. Hanilcmt Co
Performance |
| Timeline |
| Namhae Chemical |
| Hanilcmt |
Namhae Chemical and Hanilcmt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhae Chemical and Hanilcmt
The main advantage of trading using opposite Namhae Chemical and Hanilcmt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhae Chemical position performs unexpectedly, Hanilcmt 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 Hanilcmt will offset losses from the drop in Hanilcmt's long position.| Namhae Chemical vs. Taeyang Metal Industrial | Namhae Chemical vs. Dongbang Transport Logistics | Namhae Chemical vs. Formetal Co | Namhae Chemical vs. Digital Multimedia Technology |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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