Correlation Between Value Added and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Value Added and Hanjoo Light 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 Value Added and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Added Technology and Hanjoo Light Metal, you can compare the effects of market volatilities on Value Added and Hanjoo Light 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 Value Added with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Added and Hanjoo Light.
Diversification Opportunities for Value Added and Hanjoo Light
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Value and Hanjoo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Value Added Technology and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and Value Added 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 Value Added Technology are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Value Added i.e., Value Added and Hanjoo Light go up and down completely randomly.
Pair Corralation between Value Added and Hanjoo Light
Assuming the 90 days trading horizon Value Added Technology is expected to generate 0.8 times more return on investment than Hanjoo Light. However, Value Added Technology is 1.25 times less risky than Hanjoo Light. It trades about -0.15 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.2 per unit of risk. If you would invest 2,390,000 in Value Added Technology on September 2, 2024 and sell it today you would lose (350,000) from holding Value Added Technology or give up 14.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Added Technology vs. Hanjoo Light Metal
Performance |
| Timeline |
| Value Added Technology |
| Hanjoo Light Metal |
Value Added and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Added and Hanjoo Light
The main advantage of trading using opposite Value Added and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Added position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Value Added vs. AptaBio Therapeutics | Value Added vs. KT Hitel | Value Added vs. SillaJen | Value Added vs. Cytogen |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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