Correlation Between Hanmi Semiconductor and Daesung Industrial

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Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and Daesung Industrial 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 Daesung Industrial 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 Daesung Industrial Co, you can compare the effects of market volatilities on Hanmi Semiconductor and Daesung Industrial 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 Daesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and Daesung Industrial.

Diversification Opportunities for Hanmi Semiconductor and Daesung Industrial

HanmiDaesungDiversified AwayHanmiDaesungDiversified Away100%
-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hanmi and Daesung is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Daesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Industrial 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 Daesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Industrial has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Daesung Industrial go up and down completely randomly.

Pair Corralation between Hanmi Semiconductor and Daesung Industrial

Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to under-perform the Daesung Industrial. In addition to that, Hanmi Semiconductor is 2.47 times more volatile than Daesung Industrial Co. It trades about -0.19 of its total potential returns per unit of risk. Daesung Industrial Co is currently generating about 0.27 per unit of volatility. If you would invest  322,500  in Daesung Industrial Co on November 25, 2024 and sell it today you would earn a total of  22,000  from holding Daesung Industrial Co or generate 6.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hanmi Semiconductor Co  vs.  Daesung Industrial Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15042700 128820
       Timeline  
Hanmi Semiconductor 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hanmi Semiconductor Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hanmi Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb70,00080,00090,000100,000110,000120,000
Daesung Industrial 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Daesung Industrial Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Daesung Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3,0003,1003,2003,3003,4003,5003,600

Hanmi Semiconductor and Daesung Industrial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.55-10.15-6.75-3.340.03.477.0710.6614.2517.85 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15042700 128820
       Returns  

Pair Trading with Hanmi Semiconductor and Daesung Industrial

The main advantage of trading using opposite Hanmi Semiconductor and Daesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, Daesung Industrial 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 Daesung Industrial will offset losses from the drop in Daesung Industrial's long position.
The idea behind Hanmi Semiconductor Co and Daesung Industrial Co 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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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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