Correlation Between Humax Holdings and HANA Micron
Can any of the company-specific risk be diversified away by investing in both Humax Holdings and HANA Micron 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 Humax Holdings and HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humax Holdings Co and HANA Micron, you can compare the effects of market volatilities on Humax Holdings and HANA Micron 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 Humax Holdings with a short position of HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humax Holdings and HANA Micron.
Diversification Opportunities for Humax Holdings and HANA Micron
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humax and HANA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Humax Holdings Co and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron and Humax Holdings 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 Humax Holdings Co are associated (or correlated) with HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of Humax Holdings i.e., Humax Holdings and HANA Micron go up and down completely randomly.
Pair Corralation between Humax Holdings and HANA Micron
Assuming the 90 days trading horizon Humax Holdings Co is expected to under-perform the HANA Micron. In addition to that, Humax Holdings is 1.3 times more volatile than HANA Micron. It trades about -0.51 of its total potential returns per unit of risk. HANA Micron is currently generating about -0.15 per unit of volatility. If you would invest 1,020,000 in HANA Micron on September 12, 2024 and sell it today you would lose (114,000) from holding HANA Micron or give up 11.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humax Holdings Co vs. HANA Micron
Performance |
| Timeline |
| Humax Holdings |
| HANA Micron |
Humax Holdings and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humax Holdings and HANA Micron
The main advantage of trading using opposite Humax Holdings and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humax Holdings position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron's long position.| Humax Holdings vs. Genie Music | Humax Holdings vs. CJ Seafood Corp | Humax Holdings vs. Seoul Food Industrial | Humax Holdings vs. Shinsegae Food |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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