Correlation Between HANA Micron and TJ Media
Can any of the company-specific risk be diversified away by investing in both HANA Micron and TJ Media 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 TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANA Micron and TJ media Co, you can compare the effects of market volatilities on HANA Micron and TJ Media 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 TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANA Micron and TJ Media.
Diversification Opportunities for HANA Micron and TJ Media
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HANA and 032540 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding HANA Micron and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of HANA Micron i.e., HANA Micron and TJ Media go up and down completely randomly.
Pair Corralation between HANA Micron and TJ Media
Assuming the 90 days trading horizon HANA Micron is expected to generate 2.05 times more return on investment than TJ Media. However, HANA Micron is 2.05 times more volatile than TJ media Co. It trades about -0.01 of its potential returns per unit of risk. TJ media Co is currently generating about -0.01 per unit of risk. If you would invest 948,000 in HANA Micron on September 14, 2024 and sell it today you would lose (14,000) from holding HANA Micron or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANA Micron vs. TJ media Co
Performance |
| Timeline |
| HANA Micron |
| TJ media |
HANA Micron and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANA Micron and TJ Media
The main advantage of trading using opposite HANA Micron and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANA Micron position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| HANA Micron vs. TJ media Co | HANA Micron vs. DB Insurance Co | HANA Micron vs. Genie Music | HANA Micron vs. Samsung Life Insurance |
| TJ Media vs. Daou Data Corp | TJ Media vs. Solution Advanced Technology | TJ Media vs. Busan Industrial Co | TJ Media vs. Busan Ind |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |