Correlation Between Nam Hwa and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Nam Hwa 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 Nam Hwa and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nam Hwa Construction and Hanjin Transportation Co, you can compare the effects of market volatilities on Nam Hwa 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 Nam Hwa with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Hanjin Transportation.
Diversification Opportunities for Nam Hwa and Hanjin Transportation
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nam and Hanjin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Nam Hwa 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 Nam Hwa Construction 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 Nam Hwa i.e., Nam Hwa and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Nam Hwa and Hanjin Transportation
Assuming the 90 days trading horizon Nam Hwa Construction is expected to under-perform the Hanjin Transportation. In addition to that, Nam Hwa is 1.48 times more volatile than Hanjin Transportation Co. It trades about -0.03 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.0 per unit of volatility. If you would invest 1,992,633 in Hanjin Transportation Co on October 14, 2024 and sell it today you would lose (34,633) from holding Hanjin Transportation Co or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Hwa Construction vs. Hanjin Transportation Co
Performance |
| Timeline |
| Nam Hwa Construction |
| Hanjin Transportation |
Nam Hwa and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and Hanjin Transportation
The main advantage of trading using opposite Nam Hwa and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa 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.| Nam Hwa vs. Woori Financial Group | Nam Hwa vs. Jb Financial | Nam Hwa vs. Nh Investment And | Nam Hwa vs. Hyundai Heavy Industries |
| Hanjin Transportation vs. RFTech Co | Hanjin Transportation vs. BNK Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Samsung Life Insurance |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |