Correlation Between Clean Science and Hana Technology
Can any of the company-specific risk be diversified away by investing in both Clean Science and Hana Technology 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 Clean Science and Hana Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Science co and Hana Technology Co, you can compare the effects of market volatilities on Clean Science and Hana Technology 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 Clean Science with a short position of Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Hana Technology.
Diversification Opportunities for Clean Science and Hana Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clean and Hana is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science co and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology and Clean Science 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 Clean Science co are associated (or correlated) with Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of Clean Science i.e., Clean Science and Hana Technology go up and down completely randomly.
Pair Corralation between Clean Science and Hana Technology
Assuming the 90 days trading horizon Clean Science is expected to generate 1.5 times less return on investment than Hana Technology. But when comparing it to its historical volatility, Clean Science co is 2.58 times less risky than Hana Technology. It trades about 0.3 of its potential returns per unit of risk. Hana Technology Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,899,000 in Hana Technology Co on October 20, 2024 and sell it today you would earn a total of 361,000 from holding Hana Technology Co or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Science co vs. Hana Technology Co
Performance |
| Timeline |
| Clean Science co |
| Hana Technology |
Clean Science and Hana Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Science and Hana Technology
The main advantage of trading using opposite Clean Science and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science position performs unexpectedly, Hana Technology 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 Hana Technology will offset losses from the drop in Hana Technology's long position.| Clean Science vs. Daehan Steel | Clean Science vs. Daechang Steel Co | Clean Science vs. Dong A Steel Technology | Clean Science vs. BooKook Steel Co |
| Hana Technology vs. E Investment Development | Hana Technology vs. Woori Technology Investment | Hana Technology vs. KTB Investment Securities | Hana Technology vs. SV Investment |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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