Correlation Between Hanyang ENG and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Hanyang ENG and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Hanyang ENG and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanyang ENG and Choil Aluminum.
Diversification Opportunities for Hanyang ENG and Choil Aluminum
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanyang and Choil is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hanyang ENG Co and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Hanyang ENG i.e., Hanyang ENG and Choil Aluminum go up and down completely randomly.
Pair Corralation between Hanyang ENG and Choil Aluminum
Assuming the 90 days trading horizon Hanyang ENG Co is expected to generate 0.88 times more return on investment than Choil Aluminum. However, Hanyang ENG Co is 1.13 times less risky than Choil Aluminum. It trades about 0.03 of its potential returns per unit of risk. Choil Aluminum is currently generating about -0.02 per unit of risk. If you would invest 1,344,960 in Hanyang ENG Co on September 3, 2024 and sell it today you would earn a total of 282,040 from holding Hanyang ENG Co or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanyang ENG Co vs. Choil Aluminum
Performance |
| Timeline |
| Hanyang ENG |
| Choil Aluminum |
Hanyang ENG and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanyang ENG and Choil Aluminum
The main advantage of trading using opposite Hanyang ENG and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanyang ENG position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Hanyang ENG vs. Choil Aluminum | Hanyang ENG vs. Dongwon Metal Co | Hanyang ENG vs. Kukil Metal Co | Hanyang ENG vs. HB Technology TD |
| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. UNISEM Co | Choil Aluminum vs. RPBio Inc | Choil Aluminum vs. Finebesteel |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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