Correlation Between FarmStory and Hansol Inticube
Can any of the company-specific risk be diversified away by investing in both FarmStory and Hansol Inticube 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 FarmStory and Hansol Inticube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and Hansol Inticube Co, you can compare the effects of market volatilities on FarmStory and Hansol Inticube 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 FarmStory with a short position of Hansol Inticube. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and Hansol Inticube.
Diversification Opportunities for FarmStory and Hansol Inticube
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FarmStory and Hansol is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and Hansol Inticube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Inticube and FarmStory 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 FarmStory Co are associated (or correlated) with Hansol Inticube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Inticube has no effect on the direction of FarmStory i.e., FarmStory and Hansol Inticube go up and down completely randomly.
Pair Corralation between FarmStory and Hansol Inticube
Assuming the 90 days trading horizon FarmStory Co is expected to generate 0.79 times more return on investment than Hansol Inticube. However, FarmStory Co is 1.27 times less risky than Hansol Inticube. It trades about -0.03 of its potential returns per unit of risk. Hansol Inticube Co is currently generating about -0.03 per unit of risk. If you would invest 185,275 in FarmStory Co on September 3, 2024 and sell it today you would lose (69,275) from holding FarmStory Co or give up 37.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. Hansol Inticube Co
Performance |
| Timeline |
| FarmStory |
| Hansol Inticube |
FarmStory and Hansol Inticube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and Hansol Inticube
The main advantage of trading using opposite FarmStory and Hansol Inticube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, Hansol Inticube 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 Inticube will offset losses from the drop in Hansol Inticube's long position.| FarmStory vs. Hwangkum Steel Technology | FarmStory vs. KMH Hitech Co | FarmStory vs. Daiyang Metal Co | FarmStory vs. Raontech |
| Hansol Inticube vs. Dongsin Engineering Construction | Hansol Inticube vs. Doosan Fuel Cell | Hansol Inticube vs. Daishin Balance 1 | Hansol Inticube vs. Total Soft Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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