Correlation Between Hancom and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Hancom and Kukdong Oil 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 Hancom and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancom Inc and Kukdong Oil Chemicals, you can compare the effects of market volatilities on Hancom and Kukdong Oil 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 Hancom with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancom and Kukdong Oil.
Diversification Opportunities for Hancom and Kukdong Oil
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hancom and Kukdong is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hancom Inc and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and Hancom 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 Hancom Inc are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Hancom i.e., Hancom and Kukdong Oil go up and down completely randomly.
Pair Corralation between Hancom and Kukdong Oil
Assuming the 90 days trading horizon Hancom Inc is expected to generate 6.2 times more return on investment than Kukdong Oil. However, Hancom is 6.2 times more volatile than Kukdong Oil Chemicals. It trades about 0.23 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.33 per unit of risk. If you would invest 1,934,000 in Hancom Inc on September 4, 2024 and sell it today you would earn a total of 521,000 from holding Hancom Inc or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancom Inc vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| Hancom Inc |
| Kukdong Oil Chemicals |
Hancom and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancom and Kukdong Oil
The main advantage of trading using opposite Hancom and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancom position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Hancom vs. Kukdong Oil Chemicals | Hancom vs. Sung Bo Chemicals | Hancom vs. AeroSpace Technology of | Hancom vs. QUALITAS SEMICONDUCTOR LTD |
| Kukdong Oil vs. Daishin Information Communications | Kukdong Oil vs. GS Retail Co | Kukdong Oil vs. Korea Computer | Kukdong Oil vs. RF Materials Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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