Correlation Between Microfriend and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Microfriend and Hanil Iron 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 Microfriend and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Hanil Iron Steel, you can compare the effects of market volatilities on Microfriend and Hanil Iron 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 Microfriend with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Hanil Iron.
Diversification Opportunities for Microfriend and Hanil Iron
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microfriend and Hanil is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Microfriend 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 Microfriend are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Microfriend i.e., Microfriend and Hanil Iron go up and down completely randomly.
Pair Corralation between Microfriend and Hanil Iron
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Hanil Iron. In addition to that, Microfriend is 2.37 times more volatile than Hanil Iron Steel. It trades about -0.22 of its total potential returns per unit of risk. Hanil Iron Steel is currently generating about 0.05 per unit of volatility. If you would invest 199,900 in Hanil Iron Steel on August 29, 2024 and sell it today you would earn a total of 3,600 from holding Hanil Iron Steel or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Hanil Iron Steel
Performance |
| Timeline |
| Microfriend |
| Hanil Iron Steel |
Microfriend and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Hanil Iron
The main advantage of trading using opposite Microfriend and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Hanil Iron 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 Iron will offset losses from the drop in Hanil Iron's long position.| Microfriend vs. SK Hynix | Microfriend vs. LX Semicon Co | Microfriend vs. Tokai Carbon Korea | Microfriend vs. People Technology |
| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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