Correlation Between ABCO Electronics and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both ABCO Electronics and Hanmi Semiconductor 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 ABCO Electronics and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABCO Electronics Co and Hanmi Semiconductor Co, you can compare the effects of market volatilities on ABCO Electronics and Hanmi Semiconductor 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 ABCO Electronics with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABCO Electronics and Hanmi Semiconductor.
Diversification Opportunities for ABCO Electronics and Hanmi Semiconductor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABCO and Hanmi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ABCO Electronics Co and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and ABCO Electronics 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 ABCO Electronics Co are associated (or correlated) with Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of ABCO Electronics i.e., ABCO Electronics and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between ABCO Electronics and Hanmi Semiconductor
Assuming the 90 days trading horizon ABCO Electronics Co is expected to under-perform the Hanmi Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, ABCO Electronics Co is 1.41 times less risky than Hanmi Semiconductor. The stock trades about -0.15 of its potential returns per unit of risk. The Hanmi Semiconductor Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,082,930 in Hanmi Semiconductor Co on August 25, 2024 and sell it today you would earn a total of 2,257,070 from holding Hanmi Semiconductor Co or generate 37.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABCO Electronics Co vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| ABCO Electronics |
| Hanmi Semiconductor |
ABCO Electronics and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABCO Electronics and Hanmi Semiconductor
The main advantage of trading using opposite ABCO Electronics and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABCO Electronics position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.| ABCO Electronics vs. Korea Real Estate | ABCO Electronics vs. Korea Ratings Co | ABCO Electronics vs. IQuest Co | ABCO Electronics vs. Wonbang Tech Co |
| Hanmi Semiconductor vs. AptaBio Therapeutics | Hanmi Semiconductor vs. Daewoo SBI SPAC | Hanmi Semiconductor vs. Dream Security co | Hanmi Semiconductor vs. Microfriend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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