Correlation Between Hanmi Semiconductor and Homecast CoLtd
Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and Homecast CoLtd 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 Homecast CoLtd 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 Homecast CoLtd, you can compare the effects of market volatilities on Hanmi Semiconductor and Homecast CoLtd 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 Homecast CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and Homecast CoLtd.
Diversification Opportunities for Hanmi Semiconductor and Homecast CoLtd
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanmi and Homecast is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Homecast CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homecast CoLtd 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 Homecast CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homecast CoLtd has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Homecast CoLtd go up and down completely randomly.
Pair Corralation between Hanmi Semiconductor and Homecast CoLtd
Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to generate 1.61 times more return on investment than Homecast CoLtd. However, Hanmi Semiconductor is 1.61 times more volatile than Homecast CoLtd. It trades about 0.28 of its potential returns per unit of risk. Homecast CoLtd is currently generating about -0.13 per unit of risk. If you would invest 7,460,000 in Hanmi Semiconductor Co on October 30, 2024 and sell it today you would earn a total of 4,600,000 from holding Hanmi Semiconductor Co or generate 61.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanmi Semiconductor Co vs. Homecast CoLtd
Performance |
| Timeline |
| Hanmi Semiconductor |
| Homecast CoLtd |
Hanmi Semiconductor and Homecast CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanmi Semiconductor and Homecast CoLtd
The main advantage of trading using opposite Hanmi Semiconductor and Homecast CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, Homecast CoLtd 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 Homecast CoLtd will offset losses from the drop in Homecast CoLtd's long position.| Hanmi Semiconductor vs. Dongbang Transport Logistics | Hanmi Semiconductor vs. Samwha Electronics Co | Hanmi Semiconductor vs. Innowireless Co | Hanmi Semiconductor vs. Daewoo Electronic Components |
| Homecast CoLtd vs. Samsung Electronics Co | Homecast CoLtd vs. Samsung Electronics Co | Homecast CoLtd vs. SK Hynix | Homecast CoLtd vs. HMM 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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