Correlation Between Display Tech and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Display Tech and Hanjin Transportation 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 Display Tech and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Hanjin Transportation Co, you can compare the effects of market volatilities on Display Tech and Hanjin Transportation 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 Display Tech with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Hanjin Transportation.
Diversification Opportunities for Display Tech and Hanjin Transportation
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Display and Hanjin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Display Tech 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 Display Tech Co are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Display Tech i.e., Display Tech and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Display Tech and Hanjin Transportation
Assuming the 90 days trading horizon Display Tech Co is expected to generate 2.31 times more return on investment than Hanjin Transportation. However, Display Tech is 2.31 times more volatile than Hanjin Transportation Co. It trades about 0.23 of its potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.04 per unit of risk. If you would invest 289,000 in Display Tech Co on October 28, 2024 and sell it today you would earn a total of 18,000 from holding Display Tech Co or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Display Tech |
| Hanjin Transportation |
Display Tech and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Hanjin Transportation
The main advantage of trading using opposite Display Tech and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Display Tech vs. KB Financial Group | Display Tech vs. Shinhan Financial Group | Display Tech vs. Hana Financial | Display Tech vs. Woori Financial Group |
| Hanjin Transportation vs. KB Financial Group | Hanjin Transportation vs. Shinhan Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Woori Financial Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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