Correlation Between Seojin Automotive and Hancom
Can any of the company-specific risk be diversified away by investing in both Seojin Automotive and Hancom 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 Seojin Automotive and Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seojin Automotive CoLtd and Hancom Inc, you can compare the effects of market volatilities on Seojin Automotive and Hancom 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 Seojin Automotive with a short position of Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seojin Automotive and Hancom.
Diversification Opportunities for Seojin Automotive and Hancom
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Seojin and Hancom is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Seojin Automotive CoLtd and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc and Seojin Automotive 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 Seojin Automotive CoLtd are associated (or correlated) with Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Seojin Automotive i.e., Seojin Automotive and Hancom go up and down completely randomly.
Pair Corralation between Seojin Automotive and Hancom
Assuming the 90 days trading horizon Seojin Automotive CoLtd is expected to under-perform the Hancom. But the stock apears to be less risky and, when comparing its historical volatility, Seojin Automotive CoLtd is 1.4 times less risky than Hancom. The stock trades about -0.02 of its potential returns per unit of risk. The Hancom Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,415,000 in Hancom Inc on September 4, 2024 and sell it today you would earn a total of 1,040,000 from holding Hancom Inc or generate 73.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seojin Automotive CoLtd vs. Hancom Inc
Performance |
| Timeline |
| Seojin Automotive CoLtd |
| Hancom Inc |
Seojin Automotive and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seojin Automotive and Hancom
The main advantage of trading using opposite Seojin Automotive and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seojin Automotive position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| Seojin Automotive vs. Korea Real Estate | Seojin Automotive vs. Busan Industrial Co | Seojin Automotive vs. UNISEM Co | Seojin Automotive vs. RPBio Inc |
| Hancom vs. Kukdong Oil Chemicals | Hancom vs. Sung Bo Chemicals | Hancom vs. AeroSpace Technology of | Hancom vs. QUALITAS SEMICONDUCTOR LTD |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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