Correlation Between Osang Healthcare and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare and Hankook Furniture 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 Osang Healthcare and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and Hankook Furniture Co, you can compare the effects of market volatilities on Osang Healthcare and Hankook Furniture 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 Osang Healthcare with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and Hankook Furniture.
Diversification Opportunities for Osang Healthcare and Hankook Furniture
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Osang and Hankook is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Osang Healthcare 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 Osang Healthcare Co,Ltd are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Osang Healthcare i.e., Osang Healthcare and Hankook Furniture go up and down completely randomly.
Pair Corralation between Osang Healthcare and Hankook Furniture
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the Hankook Furniture. In addition to that, Osang Healthcare is 2.9 times more volatile than Hankook Furniture Co. It trades about -0.13 of its total potential returns per unit of risk. Hankook Furniture Co is currently generating about -0.01 per unit of volatility. If you would invest 433,604 in Hankook Furniture Co on September 1, 2024 and sell it today you would lose (28,104) from holding Hankook Furniture Co or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 39.73% |
| Values | Daily Returns |
Osang Healthcare Co,Ltd vs. Hankook Furniture Co
Performance |
| Timeline |
| Osang Healthcare Co,Ltd |
| Hankook Furniture |
Osang Healthcare and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osang Healthcare and Hankook Furniture
The main advantage of trading using opposite Osang Healthcare and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. LG Energy Solution | Osang Healthcare vs. SK Hynix |
| Hankook Furniture vs. LG Display | Hankook Furniture vs. Hyundai Motor | Hankook Furniture vs. Hyundai Motor Co | Hankook Furniture vs. Hyundai Motor 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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