Correlation Between Dragonfly and Hancom
Can any of the company-specific risk be diversified away by investing in both Dragonfly and Hancom 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 Dragonfly and Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and Hancom Inc, you can compare the effects of market volatilities on Dragonfly and Hancom 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 Dragonfly with a short position of Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and Hancom.
Diversification Opportunities for Dragonfly and Hancom
Very good diversification
The 3 months correlation between Dragonfly and Hancom is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Dragonfly i.e., Dragonfly and Hancom go up and down completely randomly.
Pair Corralation between Dragonfly and Hancom
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the Hancom. But the stock apears to be less risky and, when comparing its historical volatility, Dragonfly GF Co is 1.12 times less risky than Hancom. The stock trades about -0.09 of its potential returns per unit of risk. The Hancom Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,397,000 in Hancom Inc on September 2, 2024 and sell it today you would earn a total of 1,133,000 from holding Hancom Inc or generate 81.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Dragonfly GF Co vs. Hancom Inc
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hancom Inc |
Dragonfly and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and Hancom
The main advantage of trading using opposite Dragonfly and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| Dragonfly vs. Iljin Display | Dragonfly vs. Daesung Hi Tech Co | Dragonfly vs. Daou Technology | Dragonfly vs. Hwangkum Steel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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