Correlation Between Hanmi Semiconductor and Kakao Games
Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and Kakao Games 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 Kakao Games 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 Kakao Games Corp, you can compare the effects of market volatilities on Hanmi Semiconductor and Kakao Games 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 Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and Kakao Games.
Diversification Opportunities for Hanmi Semiconductor and Kakao Games
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanmi and Kakao is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Games Corp 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 Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Kakao Games go up and down completely randomly.
Pair Corralation between Hanmi Semiconductor and Kakao Games
Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to under-perform the Kakao Games. In addition to that, Hanmi Semiconductor is 1.41 times more volatile than Kakao Games Corp. It trades about -0.17 of its total potential returns per unit of risk. Kakao Games Corp is currently generating about -0.03 per unit of volatility. If you would invest 1,818,000 in Kakao Games Corp on August 28, 2024 and sell it today you would lose (115,000) from holding Kakao Games Corp or give up 6.33% 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. Kakao Games Corp
Performance |
| Timeline |
| Hanmi Semiconductor |
| Kakao Games Corp |
Hanmi Semiconductor and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanmi Semiconductor and Kakao Games
The main advantage of trading using opposite Hanmi Semiconductor and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanmi Semiconductor position performs unexpectedly, Kakao Games 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 Kakao Games will offset losses from the drop in Kakao Games' long position.| Hanmi Semiconductor vs. AptaBio Therapeutics | Hanmi Semiconductor vs. Daewoo SBI SPAC | Hanmi Semiconductor vs. Dream Security co | Hanmi Semiconductor vs. Microfriend |
| Kakao Games vs. Posco ICT | Kakao Games vs. Devsisters corporation | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. InfoBank |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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