Correlation Between Hanmi Semiconductor and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and DIGITAL CHOSUN 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 DIGITAL CHOSUN 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 DIGITAL CHOSUN, you can compare the effects of market volatilities on Hanmi Semiconductor and DIGITAL CHOSUN 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 DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and DIGITAL CHOSUN.
Diversification Opportunities for Hanmi Semiconductor and DIGITAL CHOSUN
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanmi and DIGITAL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Hanmi Semiconductor and DIGITAL CHOSUN
Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to generate 3.48 times more return on investment than DIGITAL CHOSUN. However, Hanmi Semiconductor is 3.48 times more volatile than DIGITAL CHOSUN. It trades about 0.22 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.24 per unit of risk. If you would invest 8,670,000 in Hanmi Semiconductor Co on October 18, 2024 and sell it today you would earn a total of 1,870,000 from holding Hanmi Semiconductor Co or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanmi Semiconductor Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Hanmi Semiconductor |
| DIGITAL CHOSUN |
Hanmi Semiconductor and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanmi Semiconductor and DIGITAL CHOSUN
The main advantage of trading using opposite Hanmi Semiconductor and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.The idea behind Hanmi Semiconductor Co and DIGITAL CHOSUN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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