Correlation Between ChipsMedia and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both ChipsMedia and Hanil Iron 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 ChipsMedia and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Hanil Iron Steel, you can compare the effects of market volatilities on ChipsMedia and Hanil Iron 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 ChipsMedia with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Hanil Iron.
Diversification Opportunities for ChipsMedia and Hanil Iron
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChipsMedia and Hanil is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and ChipsMedia 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 ChipsMedia are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of ChipsMedia i.e., ChipsMedia and Hanil Iron go up and down completely randomly.
Pair Corralation between ChipsMedia and Hanil Iron
Assuming the 90 days trading horizon ChipsMedia is expected to generate 1.87 times more return on investment than Hanil Iron. However, ChipsMedia is 1.87 times more volatile than Hanil Iron Steel. It trades about 0.01 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about 0.01 per unit of risk. If you would invest 1,307,000 in ChipsMedia on September 13, 2024 and sell it today you would lose (17,000) from holding ChipsMedia or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Hanil Iron Steel
Performance |
| Timeline |
| ChipsMedia |
| Hanil Iron Steel |
ChipsMedia and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Hanil Iron
The main advantage of trading using opposite ChipsMedia and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
| Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. SK Hynix | Hanil Iron vs. POSCO Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |