Correlation Between AhnLab and Han Kook
Can any of the company-specific risk be diversified away by investing in both AhnLab and Han Kook 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 AhnLab and Han Kook into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AhnLab Inc and Han Kook Capital, you can compare the effects of market volatilities on AhnLab and Han Kook 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 AhnLab with a short position of Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of AhnLab and Han Kook.
Diversification Opportunities for AhnLab and Han Kook
Pay attention - limited upside
The 3 months correlation between AhnLab and Han is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AhnLab Inc and Han Kook Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Capital and AhnLab 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 AhnLab Inc are associated (or correlated) with Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Capital has no effect on the direction of AhnLab i.e., AhnLab and Han Kook go up and down completely randomly.
Pair Corralation between AhnLab and Han Kook
Assuming the 90 days trading horizon AhnLab Inc is expected to generate 2.76 times more return on investment than Han Kook. However, AhnLab is 2.76 times more volatile than Han Kook Capital. It trades about 0.0 of its potential returns per unit of risk. Han Kook Capital is currently generating about -0.05 per unit of risk. If you would invest 6,120,000 in AhnLab Inc on September 5, 2024 and sell it today you would lose (50,000) from holding AhnLab Inc or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AhnLab Inc vs. Han Kook Capital
Performance |
| Timeline |
| AhnLab Inc |
| Han Kook Capital |
AhnLab and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AhnLab and Han Kook
The main advantage of trading using opposite AhnLab and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AhnLab position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| AhnLab vs. Dongsin Engineering Construction | AhnLab vs. Doosan Fuel Cell | AhnLab vs. Daishin Balance 1 | AhnLab vs. Total Soft Bank |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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