Correlation Between HANA Micron and Humax Holdings
Can any of the company-specific risk be diversified away by investing in both HANA Micron and Humax Holdings 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 HANA Micron and Humax Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANA Micron and Humax Holdings Co, you can compare the effects of market volatilities on HANA Micron and Humax Holdings 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 HANA Micron with a short position of Humax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANA Micron and Humax Holdings.
Diversification Opportunities for HANA Micron and Humax Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HANA and Humax is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding HANA Micron and Humax Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax Holdings and HANA Micron 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 HANA Micron are associated (or correlated) with Humax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax Holdings has no effect on the direction of HANA Micron i.e., HANA Micron and Humax Holdings go up and down completely randomly.
Pair Corralation between HANA Micron and Humax Holdings
Assuming the 90 days trading horizon HANA Micron is expected to generate 0.8 times more return on investment than Humax Holdings. However, HANA Micron is 1.25 times less risky than Humax Holdings. It trades about 0.03 of its potential returns per unit of risk. Humax Holdings Co is currently generating about 0.02 per unit of risk. If you would invest 941,837 in HANA Micron on November 2, 2024 and sell it today you would earn a total of 168,163 from holding HANA Micron or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANA Micron vs. Humax Holdings Co
Performance |
| Timeline |
| HANA Micron |
| Humax Holdings |
HANA Micron and Humax Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANA Micron and Humax Holdings
The main advantage of trading using opposite HANA Micron and Humax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANA Micron position performs unexpectedly, Humax Holdings 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 Humax Holdings will offset losses from the drop in Humax Holdings' long position.| HANA Micron vs. SBI Investment KOREA | HANA Micron vs. Daishin Information Communications | HANA Micron vs. SCI Information Service | HANA Micron vs. Nice Information Telecommunication |
| Humax Holdings vs. Solution Advanced Technology | Humax Holdings vs. Adaptive Plasma Technology | Humax Holdings vs. Seoam Machinery Industry | Humax Holdings vs. Seohee Construction 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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