Correlation Between Spolytech and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both Spolytech and Hanil Chemical 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 Spolytech and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Hanil Chemical Ind, you can compare the effects of market volatilities on Spolytech and Hanil Chemical 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 Spolytech with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Hanil Chemical.
Diversification Opportunities for Spolytech and Hanil Chemical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spolytech and Hanil is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and Spolytech 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 Spolytech Co are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of Spolytech i.e., Spolytech and Hanil Chemical go up and down completely randomly.
Pair Corralation between Spolytech and Hanil Chemical
Assuming the 90 days trading horizon Spolytech Co is expected to generate 0.98 times more return on investment than Hanil Chemical. However, Spolytech Co is 1.02 times less risky than Hanil Chemical. It trades about 0.04 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about 0.03 per unit of risk. If you would invest 142,200 in Spolytech Co on November 3, 2024 and sell it today you would earn a total of 11,200 from holding Spolytech Co or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spolytech Co vs. Hanil Chemical Ind
Performance |
| Timeline |
| Spolytech |
| Hanil Chemical Ind |
Spolytech and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Hanil Chemical
The main advantage of trading using opposite Spolytech and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| Spolytech vs. Samyoung Electronics Co | Spolytech vs. Worldex Industry Trading | Spolytech vs. Daejoo Electronic Materials | Spolytech vs. PJ Electronics Co |
| Hanil Chemical vs. Daechang Steel Co | Hanil Chemical vs. INSUN Environmental New | Hanil Chemical vs. Jahwa Electronics Co | Hanil Chemical vs. ABCO Electronics 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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