Correlation Between Hanmi Semiconductor and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and Korea Refractories 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 Hanmi Semiconductor and Korea Refractories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanmi Semiconductor Co and Korea Refractories Co, you can compare the effects of market volatilities on Hanmi Semiconductor and Korea Refractories 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 Hanmi Semiconductor with a short position of Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and Korea Refractories.
Diversification Opportunities for Hanmi Semiconductor and Korea Refractories
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanmi and Korea is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories and Hanmi Semiconductor 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 Hanmi Semiconductor Co are associated (or correlated) with Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Korea Refractories go up and down completely randomly.
Pair Corralation between Hanmi Semiconductor and Korea Refractories
Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to under-perform the Korea Refractories. In addition to that, Hanmi Semiconductor is 3.0 times more volatile than Korea Refractories Co. It trades about -0.18 of its total potential returns per unit of risk. Korea Refractories Co is currently generating about -0.16 per unit of volatility. If you would invest 220,000 in Korea Refractories Co on November 27, 2024 and sell it today you would lose (7,000) from holding Korea Refractories Co or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanmi Semiconductor Co vs. Korea Refractories Co
Performance |
| Timeline |
| Hanmi Semiconductor |
| Korea Refractories |
Hanmi Semiconductor and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanmi Semiconductor and Korea Refractories
The main advantage of trading using opposite Hanmi Semiconductor and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' long position.| Hanmi Semiconductor vs. Songwon Industrial Co | Hanmi Semiconductor vs. Cheryong Industrial CoLtd | Hanmi Semiconductor vs. Iljin Display | Hanmi Semiconductor vs. Formetal Co |
| Korea Refractories vs. DB Insurance Co | Korea Refractories vs. Hyundai Engineering Construction | Korea Refractories vs. Incar Financial Service | Korea Refractories vs. Koryo Credit Information |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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