Correlation Between Hanyang ENG and SEOHAN Const
Can any of the company-specific risk be diversified away by investing in both Hanyang ENG and SEOHAN Const 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 Hanyang ENG and SEOHAN Const into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanyang ENG Co and SEOHAN Const EngcoLtd, you can compare the effects of market volatilities on Hanyang ENG and SEOHAN Const 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 Hanyang ENG with a short position of SEOHAN Const. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanyang ENG and SEOHAN Const.
Diversification Opportunities for Hanyang ENG and SEOHAN Const
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanyang and SEOHAN is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hanyang ENG Co and SEOHAN Const EngcoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOHAN Const EngcoLtd and Hanyang ENG 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 Hanyang ENG Co are associated (or correlated) with SEOHAN Const. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOHAN Const EngcoLtd has no effect on the direction of Hanyang ENG i.e., Hanyang ENG and SEOHAN Const go up and down completely randomly.
Pair Corralation between Hanyang ENG and SEOHAN Const
Assuming the 90 days trading horizon Hanyang ENG Co is expected to under-perform the SEOHAN Const. But the stock apears to be less risky and, when comparing its historical volatility, Hanyang ENG Co is 1.2 times less risky than SEOHAN Const. The stock trades about -0.02 of its potential returns per unit of risk. The SEOHAN Const EngcoLtd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 76,800 in SEOHAN Const EngcoLtd on August 28, 2024 and sell it today you would earn a total of 2,200 from holding SEOHAN Const EngcoLtd or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hanyang ENG Co vs. SEOHAN Const EngcoLtd
Performance |
| Timeline |
| Hanyang ENG |
| SEOHAN Const EngcoLtd |
Hanyang ENG and SEOHAN Const Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanyang ENG and SEOHAN Const
The main advantage of trading using opposite Hanyang ENG and SEOHAN Const positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanyang ENG position performs unexpectedly, SEOHAN Const 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 SEOHAN Const will offset losses from the drop in SEOHAN Const's long position.| Hanyang ENG vs. Samsung Electronics Co | Hanyang ENG vs. Samsung Electronics Co | Hanyang ENG vs. Hyundai Motor Co | Hanyang ENG vs. Hyundai Motor |
| SEOHAN Const vs. Ssangyong Information Communication | SEOHAN Const vs. Innowireless Co | SEOHAN Const vs. Korean Air Lines | SEOHAN Const vs. Air Busan 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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