Correlation Between Chorokbaem Healthcare and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Chorokbaem Healthcare and Hana Materials 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 Chorokbaem Healthcare and Hana Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chorokbaem Healthcare Co and Hana Materials, you can compare the effects of market volatilities on Chorokbaem Healthcare and Hana Materials 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 Chorokbaem Healthcare with a short position of Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chorokbaem Healthcare and Hana Materials.
Diversification Opportunities for Chorokbaem Healthcare and Hana Materials
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chorokbaem and Hana is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chorokbaem Healthcare Co and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials and Chorokbaem Healthcare 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 Chorokbaem Healthcare Co are associated (or correlated) with Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of Chorokbaem Healthcare i.e., Chorokbaem Healthcare and Hana Materials go up and down completely randomly.
Pair Corralation between Chorokbaem Healthcare and Hana Materials
Assuming the 90 days trading horizon Chorokbaem Healthcare is expected to generate 5.74 times less return on investment than Hana Materials. But when comparing it to its historical volatility, Chorokbaem Healthcare Co is 3.1 times less risky than Hana Materials. It trades about 0.14 of its potential returns per unit of risk. Hana Materials is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,300,000 in Hana Materials on December 4, 2024 and sell it today you would earn a total of 655,000 from holding Hana Materials or generate 28.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chorokbaem Healthcare Co vs. Hana Materials
Performance |
| Timeline |
| Chorokbaem Healthcare |
| Hana Materials |
Chorokbaem Healthcare and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chorokbaem Healthcare and Hana Materials
The main advantage of trading using opposite Chorokbaem Healthcare and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chorokbaem Healthcare position performs unexpectedly, Hana Materials 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 Materials will offset losses from the drop in Hana Materials' long position.| Chorokbaem Healthcare vs. Korean Air Lines | Chorokbaem Healthcare vs. Jin Air Co | Chorokbaem Healthcare vs. Korean Drug Co | Chorokbaem Healthcare vs. Stic Investments |
| Hana Materials vs. Cube Entertainment | Hana Materials vs. Daewon Media Co | Hana Materials vs. Lotte Chilsung Beverage | Hana Materials vs. MEDIANA CoLtd |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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