Correlation Between Haesung Industrial and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Haesung Industrial and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Hansol Homedeco.
Diversification Opportunities for Haesung Industrial and Hansol Homedeco
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haesung and Hansol is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Haesung Industrial and Hansol Homedeco
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the Hansol Homedeco. In addition to that, Haesung Industrial is 1.08 times more volatile than Hansol Homedeco Co. It trades about -0.06 of its total potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of volatility. If you would invest 102,500 in Hansol Homedeco Co on September 19, 2024 and sell it today you would lose (36,100) from holding Hansol Homedeco Co or give up 35.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Haesung Industrial |
| Hansol Homedeco |
Haesung Industrial and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and Hansol Homedeco
The main advantage of trading using opposite Haesung Industrial and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, Hansol Homedeco 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 Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Haesung Industrial vs. Solution Advanced Technology | Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Sam Chun Dang |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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