Correlation Between Wave Electronics and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Wave Electronics and Hankukpackage 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 Wave Electronics and Hankukpackage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wave Electronics Co and Hankukpackage Co, you can compare the effects of market volatilities on Wave Electronics and Hankukpackage 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 Wave Electronics with a short position of Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wave Electronics and Hankukpackage.
Diversification Opportunities for Wave Electronics and Hankukpackage
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wave and Hankukpackage is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wave Electronics Co and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage and Wave Electronics 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 Wave Electronics Co are associated (or correlated) with Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Wave Electronics i.e., Wave Electronics and Hankukpackage go up and down completely randomly.
Pair Corralation between Wave Electronics and Hankukpackage
Assuming the 90 days trading horizon Wave Electronics is expected to generate 1.12 times less return on investment than Hankukpackage. But when comparing it to its historical volatility, Wave Electronics Co is 1.91 times less risky than Hankukpackage. It trades about 0.3 of its potential returns per unit of risk. Hankukpackage Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 162,594 in Hankukpackage Co on October 11, 2024 and sell it today you would earn a total of 17,306 from holding Hankukpackage Co or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wave Electronics Co vs. Hankukpackage Co
Performance |
| Timeline |
| Wave Electronics |
| Hankukpackage |
Wave Electronics and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wave Electronics and Hankukpackage
The main advantage of trading using opposite Wave Electronics and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Electronics position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.| Wave Electronics vs. Kukdong Oil Chemicals | Wave Electronics vs. DB Insurance Co | Wave Electronics vs. Dongbu Insurance Co | Wave Electronics vs. Samsung Publishing Co |
| Hankukpackage vs. Wave Electronics Co | Hankukpackage vs. DB Financial Investment | Hankukpackage vs. KTB Investment Securities | Hankukpackage vs. Sungmoon Electronics Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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