Correlation Between Hyunwoo Industrial and Hansol Chemical
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Hansol Chemical 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 Hyunwoo Industrial and Hansol Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyunwoo Industrial Co and Hansol Chemical Co, you can compare the effects of market volatilities on Hyunwoo Industrial and Hansol Chemical 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 Hyunwoo Industrial with a short position of Hansol Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Hansol Chemical.
Diversification Opportunities for Hyunwoo Industrial and Hansol Chemical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyunwoo and Hansol is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Hansol Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Chemical and Hyunwoo Industrial 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 Hyunwoo Industrial Co are associated (or correlated) with Hansol Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Chemical has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Hansol Chemical go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Hansol Chemical
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to generate 0.92 times more return on investment than Hansol Chemical. However, Hyunwoo Industrial Co is 1.09 times less risky than Hansol Chemical. It trades about 0.02 of its potential returns per unit of risk. Hansol Chemical Co is currently generating about -0.33 per unit of risk. If you would invest 261,500 in Hyunwoo Industrial Co on November 7, 2024 and sell it today you would earn a total of 1,000.00 from holding Hyunwoo Industrial Co or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Hansol Chemical Co
Performance |
| Timeline |
| Hyunwoo Industrial |
| Hansol Chemical |
Hyunwoo Industrial and Hansol Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Hansol Chemical
The main advantage of trading using opposite Hyunwoo Industrial and Hansol Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Hansol Chemical 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 Hansol Chemical will offset losses from the drop in Hansol Chemical's long position.| Hyunwoo Industrial vs. SK Hynix | Hyunwoo Industrial vs. LX Semicon Co | Hyunwoo Industrial vs. Tokai Carbon Korea | Hyunwoo Industrial vs. People Technology |
| Hansol Chemical vs. Automobile Pc | Hansol Chemical vs. Puloon Technology | Hansol Chemical vs. Seers Technology | Hansol Chemical vs. Bosung Power Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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