Correlation Between Namhwa Industrial and Hansol Inticube
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Hansol Inticube 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 Namhwa Industrial and Hansol Inticube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhwa Industrial Co and Hansol Inticube Co, you can compare the effects of market volatilities on Namhwa Industrial and Hansol Inticube 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 Namhwa Industrial with a short position of Hansol Inticube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Hansol Inticube.
Diversification Opportunities for Namhwa Industrial and Hansol Inticube
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Namhwa and Hansol is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Hansol Inticube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Inticube and Namhwa 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 Namhwa Industrial Co are associated (or correlated) with Hansol Inticube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Inticube has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Hansol Inticube go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Hansol Inticube
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to generate 0.42 times more return on investment than Hansol Inticube. However, Namhwa Industrial Co is 2.36 times less risky than Hansol Inticube. It trades about -0.07 of its potential returns per unit of risk. Hansol Inticube Co is currently generating about -0.03 per unit of risk. If you would invest 767,324 in Namhwa Industrial Co on August 31, 2024 and sell it today you would lose (243,324) from holding Namhwa Industrial Co or give up 31.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Hansol Inticube Co
Performance |
| Timeline |
| Namhwa Industrial |
| Hansol Inticube |
Namhwa Industrial and Hansol Inticube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Hansol Inticube
The main advantage of trading using opposite Namhwa Industrial and Hansol Inticube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Hansol Inticube 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 Inticube will offset losses from the drop in Hansol Inticube's long position.| Namhwa Industrial vs. Busan Industrial Co | Namhwa Industrial vs. Busan Ind | Namhwa Industrial vs. Mirae Asset Daewoo | Namhwa Industrial vs. Finebesteel |
| Hansol Inticube vs. Myoung Shin Industrial | Hansol Inticube vs. Namhwa Industrial Co | Hansol Inticube vs. Daiyang Metal Co | Hansol Inticube vs. PJ Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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