Correlation Between Green Cross and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Green Cross and Hankook Furniture 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 Green Cross and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Hankook Furniture Co, you can compare the effects of market volatilities on Green Cross and Hankook Furniture 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 Green Cross with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Hankook Furniture.
Diversification Opportunities for Green Cross and Hankook Furniture
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Hankook is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Green Cross 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 Green Cross Medical are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Green Cross i.e., Green Cross and Hankook Furniture go up and down completely randomly.
Pair Corralation between Green Cross and Hankook Furniture
Assuming the 90 days trading horizon Green Cross Medical is expected to under-perform the Hankook Furniture. In addition to that, Green Cross is 1.56 times more volatile than Hankook Furniture Co. It trades about -0.1 of its total potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.17 per unit of volatility. If you would invest 367,519 in Hankook Furniture Co on August 25, 2024 and sell it today you would earn a total of 38,981 from holding Hankook Furniture Co or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Hankook Furniture Co
Performance |
| Timeline |
| Green Cross Medical |
| Hankook Furniture |
Green Cross and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Hankook Furniture
The main advantage of trading using opposite Green Cross and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Green Cross vs. Medy Tox | Green Cross vs. Genexine | Green Cross vs. Busan Industrial Co | Green Cross vs. Busan Ind |
| Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind | Hankook Furniture vs. Mirae Asset Daewoo | Hankook Furniture vs. UNISEM 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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