Correlation Between Korea New and HansBiomed
Can any of the company-specific risk be diversified away by investing in both Korea New and HansBiomed 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 Korea New and HansBiomed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and HansBiomed, you can compare the effects of market volatilities on Korea New and HansBiomed 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 Korea New with a short position of HansBiomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and HansBiomed.
Diversification Opportunities for Korea New and HansBiomed
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and HansBiomed is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and HansBiomed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HansBiomed and Korea New 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 Korea New Network are associated (or correlated) with HansBiomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HansBiomed has no effect on the direction of Korea New i.e., Korea New and HansBiomed go up and down completely randomly.
Pair Corralation between Korea New and HansBiomed
Assuming the 90 days trading horizon Korea New Network is expected to under-perform the HansBiomed. But the stock apears to be less risky and, when comparing its historical volatility, Korea New Network is 1.54 times less risky than HansBiomed. The stock trades about 0.0 of its potential returns per unit of risk. The HansBiomed is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 990,000 in HansBiomed on August 28, 2024 and sell it today you would lose (219,000) from holding HansBiomed or give up 22.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. HansBiomed
Performance |
| Timeline |
| Korea New Network |
| HansBiomed |
Korea New and HansBiomed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and HansBiomed
The main advantage of trading using opposite Korea New and HansBiomed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, HansBiomed 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 HansBiomed will offset losses from the drop in HansBiomed's long position.| Korea New vs. Samsung Electronics Co | Korea New vs. Samsung Electronics Co | Korea New vs. LG Energy Solution | Korea New vs. SK Hynix |
| HansBiomed vs. Dong A Steel Technology | HansBiomed vs. Puloon Technology | HansBiomed vs. Woori Technology | HansBiomed vs. FoodNamoo |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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