Correlation Between Hankukpackage and Lake Materials
Can any of the company-specific risk be diversified away by investing in both Hankukpackage and Lake Materials 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 Hankukpackage and Lake Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankukpackage Co and Lake Materials Co, you can compare the effects of market volatilities on Hankukpackage and Lake Materials 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 Hankukpackage with a short position of Lake Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankukpackage and Lake Materials.
Diversification Opportunities for Hankukpackage and Lake Materials
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hankukpackage and Lake is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hankukpackage Co and Lake Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Materials and Hankukpackage 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 Hankukpackage Co are associated (or correlated) with Lake Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Materials has no effect on the direction of Hankukpackage i.e., Hankukpackage and Lake Materials go up and down completely randomly.
Pair Corralation between Hankukpackage and Lake Materials
Assuming the 90 days trading horizon Hankukpackage Co is expected to under-perform the Lake Materials. But the stock apears to be less risky and, when comparing its historical volatility, Hankukpackage Co is 2.66 times less risky than Lake Materials. The stock trades about -0.03 of its potential returns per unit of risk. The Lake Materials Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 518,000 in Lake Materials Co on October 13, 2024 and sell it today you would earn a total of 679,000 from holding Lake Materials Co or generate 131.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankukpackage Co vs. Lake Materials Co
Performance |
| Timeline |
| Hankukpackage |
| Lake Materials |
Hankukpackage and Lake Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankukpackage and Lake Materials
The main advantage of trading using opposite Hankukpackage and Lake Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankukpackage position performs unexpectedly, Lake Materials 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 Lake Materials will offset losses from the drop in Lake Materials' long position.| Hankukpackage vs. Leaders Technology Investment | Hankukpackage vs. TS Investment Corp | Hankukpackage vs. Inzi Display CoLtd | Hankukpackage vs. Sangsin Energy Display |
| Lake Materials vs. Dongbu Insurance Co | Lake Materials vs. Shinhan Inverse Silver | Lake Materials vs. Hankukpackage Co | Lake Materials vs. ChipsMedia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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