Correlation Between Haesung Industrial and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and Hanjin Transportation 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 Haesung Industrial and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and Hanjin Transportation Co, you can compare the effects of market volatilities on Haesung Industrial and Hanjin Transportation 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 Haesung Industrial with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Hanjin Transportation.
Diversification Opportunities for Haesung Industrial and Hanjin Transportation
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haesung and Hanjin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Haesung Industrial 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 Haesung Industrial Co are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Haesung Industrial and Hanjin Transportation
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the Hanjin Transportation. In addition to that, Haesung Industrial is 1.25 times more volatile than Hanjin Transportation Co. It trades about -0.33 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about -0.03 per unit of volatility. If you would invest 1,917,000 in Hanjin Transportation Co on September 1, 2024 and sell it today you would lose (17,000) from holding Hanjin Transportation Co or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Haesung Industrial |
| Hanjin Transportation |
Haesung Industrial and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and Hanjin Transportation
The main advantage of trading using opposite Haesung Industrial and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Haesung Industrial vs. Daejoo Electronic Materials | Haesung Industrial vs. Bohae Brewery | Haesung Industrial vs. Sungdo Engineering Construction | Haesung Industrial vs. Cuckoo Electronics Co |
| Hanjin Transportation vs. Hanwha InvestmentSecurities Co | Hanjin Transportation vs. LB Investment | Hanjin Transportation vs. DSC Investment | Hanjin Transportation vs. Coloray International Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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