Correlation Between Haesung Industrial and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and INNOX Advanced 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 INNOX Advanced 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 INNOX Advanced Materials, you can compare the effects of market volatilities on Haesung Industrial and INNOX Advanced 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 INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and INNOX Advanced.
Diversification Opportunities for Haesung Industrial and INNOX Advanced
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haesung and INNOX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials 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 INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and INNOX Advanced go up and down completely randomly.
Pair Corralation between Haesung Industrial and INNOX Advanced
Assuming the 90 days trading horizon Haesung Industrial Co is expected to generate 0.63 times more return on investment than INNOX Advanced. However, Haesung Industrial Co is 1.59 times less risky than INNOX Advanced. It trades about -0.07 of its potential returns per unit of risk. INNOX Advanced Materials is currently generating about -0.05 per unit of risk. If you would invest 801,855 in Haesung Industrial Co on September 4, 2024 and sell it today you would lose (209,855) from holding Haesung Industrial Co or give up 26.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. INNOX Advanced Materials
Performance |
| Timeline |
| Haesung Industrial |
| INNOX Advanced Materials |
Haesung Industrial and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and INNOX Advanced
The main advantage of trading using opposite Haesung Industrial and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. UNISEM Co | Haesung Industrial vs. RPBio Inc | Haesung Industrial vs. Finebesteel |
| INNOX Advanced vs. Haesung Industrial Co | INNOX Advanced vs. Dongbang Transport Logistics | INNOX Advanced vs. RF Materials Co | INNOX Advanced vs. Union Materials Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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