Correlation Between ABOV Semiconductor and Hana Technology
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and Hana Technology 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 ABOV Semiconductor and Hana Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and Hana Technology Co, you can compare the effects of market volatilities on ABOV Semiconductor and Hana Technology 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 ABOV Semiconductor with a short position of Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Hana Technology.
Diversification Opportunities for ABOV Semiconductor and Hana Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABOV and Hana is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology and ABOV Semiconductor 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 ABOV Semiconductor Co are associated (or correlated) with Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and Hana Technology go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Hana Technology
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 0.67 times more return on investment than Hana Technology. However, ABOV Semiconductor Co is 1.49 times less risky than Hana Technology. It trades about -0.3 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.25 per unit of risk. If you would invest 986,000 in ABOV Semiconductor Co on August 30, 2024 and sell it today you would lose (169,000) from holding ABOV Semiconductor Co or give up 17.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Hana Technology Co
Performance |
| Timeline |
| ABOV Semiconductor |
| Hana Technology |
ABOV Semiconductor and Hana Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Hana Technology
The main advantage of trading using opposite ABOV Semiconductor and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, Hana Technology 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 Hana Technology will offset losses from the drop in Hana Technology's long position.| ABOV Semiconductor vs. Dongbang Ship Machinery | ABOV Semiconductor vs. HJ ShipBuilding Construction | ABOV Semiconductor vs. Hanmi Semiconductor Co | ABOV Semiconductor vs. Tuksu Engineering ConstructionLtd |
| Hana Technology vs. CS BEARING CoLtd | Hana Technology vs. DAEMO Engineering Co | Hana Technology vs. Booster 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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