Correlation Between Hanmi Semiconductor and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and Nam Hwa 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 Nam Hwa 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 Nam Hwa Construction, you can compare the effects of market volatilities on Hanmi Semiconductor and Nam Hwa 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 Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and Nam Hwa.
Diversification Opportunities for Hanmi Semiconductor and Nam Hwa
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanmi and Nam is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction 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 Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Nam Hwa go up and down completely randomly.
Pair Corralation between Hanmi Semiconductor and Nam Hwa
Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to generate 3.87 times more return on investment than Nam Hwa. However, Hanmi Semiconductor is 3.87 times more volatile than Nam Hwa Construction. It trades about 0.39 of its potential returns per unit of risk. Nam Hwa Construction is currently generating about -0.07 per unit of risk. If you would invest 8,320,000 in Hanmi Semiconductor Co on October 28, 2024 and sell it today you would earn a total of 3,740,000 from holding Hanmi Semiconductor Co or generate 44.95% 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. Nam Hwa Construction
Performance |
| Timeline |
| Hanmi Semiconductor |
| Nam Hwa Construction |
Hanmi Semiconductor and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanmi Semiconductor and Nam Hwa
The main advantage of trading using opposite Hanmi Semiconductor and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.| Hanmi Semiconductor vs. Hyundai Engineering Construction | Hanmi Semiconductor vs. SEOJEON ELECTRIC MACHINERY | Hanmi Semiconductor vs. ENERGYMACHINERY KOREA CoLtd | Hanmi Semiconductor vs. Genie Music |
| Nam Hwa vs. Nice Information Telecommunication | Nam Hwa vs. Moadata Co | Nam Hwa vs. Golden Bridge Investment | Nam Hwa vs. Woori Technology Investment |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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