Correlation Between JNK Heaters and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both JNK Heaters and Hanil Chemical 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 JNK Heaters and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JNK Heaters Co and Hanil Chemical Ind, you can compare the effects of market volatilities on JNK Heaters and Hanil Chemical 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 JNK Heaters with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JNK Heaters and Hanil Chemical.
Diversification Opportunities for JNK Heaters and Hanil Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JNK and Hanil is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding JNK Heaters Co and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and JNK Heaters 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 JNK Heaters Co are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of JNK Heaters i.e., JNK Heaters and Hanil Chemical go up and down completely randomly.
Pair Corralation between JNK Heaters and Hanil Chemical
Assuming the 90 days trading horizon JNK Heaters Co is expected to generate 2.91 times more return on investment than Hanil Chemical. However, JNK Heaters is 2.91 times more volatile than Hanil Chemical Ind. It trades about 0.21 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about -0.4 per unit of risk. If you would invest 331,500 in JNK Heaters Co on October 20, 2024 and sell it today you would earn a total of 32,000 from holding JNK Heaters Co or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JNK Heaters Co vs. Hanil Chemical Ind
Performance |
| Timeline |
| JNK Heaters |
| Hanil Chemical Ind |
JNK Heaters and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JNK Heaters and Hanil Chemical
The main advantage of trading using opposite JNK Heaters and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JNK Heaters position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| JNK Heaters vs. Daou Data Corp | JNK Heaters vs. Busan Industrial Co | JNK Heaters vs. Busan Ind | JNK Heaters vs. Mirae Asset Daewoo |
| Hanil Chemical vs. LG Chemicals | Hanil Chemical vs. POSCO Holdings | Hanil Chemical vs. Lotte Chemical Corp | Hanil Chemical vs. Hyundai Steel |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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