Correlation Between HANA Micron and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both HANA Micron and KHVATEC CoLtd 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 KHVATEC CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANA Micron and KHVATEC CoLtd, you can compare the effects of market volatilities on HANA Micron and KHVATEC CoLtd 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 KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANA Micron and KHVATEC CoLtd.
Diversification Opportunities for HANA Micron and KHVATEC CoLtd
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HANA and KHVATEC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HANA Micron and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd 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 KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of HANA Micron i.e., HANA Micron and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between HANA Micron and KHVATEC CoLtd
Assuming the 90 days trading horizon HANA Micron is expected to under-perform the KHVATEC CoLtd. In addition to that, HANA Micron is 1.43 times more volatile than KHVATEC CoLtd. It trades about -0.17 of its total potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.17 per unit of volatility. If you would invest 959,000 in KHVATEC CoLtd on September 13, 2024 and sell it today you would lose (155,000) from holding KHVATEC CoLtd or give up 16.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
HANA Micron vs. KHVATEC CoLtd
Performance |
| Timeline |
| HANA Micron |
| KHVATEC CoLtd |
HANA Micron and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANA Micron and KHVATEC CoLtd
The main advantage of trading using opposite HANA Micron and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANA Micron position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd's long position.| HANA Micron vs. SKONEC Entertainment Co | HANA Micron vs. MEDIANA CoLtd | HANA Micron vs. T3 Entertainment Co | HANA Micron vs. Genie Music |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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