Correlation Between KPX Green and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both KPX Green and Hanjoo Light 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 KPX Green and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Hanjoo Light Metal, you can compare the effects of market volatilities on KPX Green and Hanjoo Light 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 KPX Green with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Hanjoo Light.
Diversification Opportunities for KPX Green and Hanjoo Light
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between KPX and Hanjoo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and KPX Green 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 KPX Green Chemical are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of KPX Green i.e., KPX Green and Hanjoo Light go up and down completely randomly.
Pair Corralation between KPX Green and Hanjoo Light
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 3.22 times more return on investment than Hanjoo Light. However, KPX Green is 3.22 times more volatile than Hanjoo Light Metal. It trades about 0.45 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.03 per unit of risk. If you would invest 488,216 in KPX Green Chemical on October 16, 2024 and sell it today you would earn a total of 296,784 from holding KPX Green Chemical or generate 60.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Hanjoo Light Metal
Performance |
| Timeline |
| KPX Green Chemical |
| Hanjoo Light Metal |
KPX Green and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Hanjoo Light
The main advantage of trading using opposite KPX Green and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| KPX Green vs. Hanjoo Light Metal | KPX Green vs. Husteel | KPX Green vs. Genie Music | KPX Green vs. Samhyun Steel Co |
| Hanjoo Light vs. SK Telecom Co | Hanjoo Light vs. Foodnamoo | Hanjoo Light vs. Nice Information Telecommunication | Hanjoo Light vs. CJ Seafood Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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