Correlation Between Namhwa Industrial and Hanjinkal
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Hanjinkal 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 Hanjinkal 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 Hanjinkal, you can compare the effects of market volatilities on Namhwa Industrial and Hanjinkal 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 Hanjinkal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Hanjinkal.
Diversification Opportunities for Namhwa Industrial and Hanjinkal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Namhwa and Hanjinkal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Hanjinkal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjinkal 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 Hanjinkal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjinkal has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Hanjinkal go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Hanjinkal
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to under-perform the Hanjinkal. But the stock apears to be less risky and, when comparing its historical volatility, Namhwa Industrial Co is 2.75 times less risky than Hanjinkal. The stock trades about -0.03 of its potential returns per unit of risk. The Hanjinkal is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,356,744 in Hanjinkal on August 25, 2024 and sell it today you would earn a total of 2,233,256 from holding Hanjinkal or generate 41.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Hanjinkal
Performance |
| Timeline |
| Namhwa Industrial |
| Hanjinkal |
Namhwa Industrial and Hanjinkal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Hanjinkal
The main advantage of trading using opposite Namhwa Industrial and Hanjinkal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Hanjinkal 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 Hanjinkal will offset losses from the drop in Hanjinkal's long position.| Namhwa Industrial vs. Hanjinkal | Namhwa Industrial vs. Busan Industrial Co | Namhwa Industrial vs. Busan Ind | Namhwa Industrial vs. Mirae Asset Daewoo |
| Hanjinkal vs. Samsung Electronics Co | Hanjinkal vs. Samsung Electronics Co | Hanjinkal vs. LG Energy Solution | Hanjinkal vs. SK Hynix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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