Correlation Between Hironic and Samwha Electronics
Can any of the company-specific risk be diversified away by investing in both Hironic and Samwha Electronics 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 Hironic and Samwha Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hironic Co and Samwha Electronics Co, you can compare the effects of market volatilities on Hironic and Samwha Electronics 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 Hironic with a short position of Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hironic and Samwha Electronics.
Diversification Opportunities for Hironic and Samwha Electronics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hironic and Samwha is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hironic Co and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics and Hironic 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 Hironic Co are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Hironic i.e., Hironic and Samwha Electronics go up and down completely randomly.
Pair Corralation between Hironic and Samwha Electronics
Assuming the 90 days trading horizon Hironic Co is expected to generate 0.8 times more return on investment than Samwha Electronics. However, Hironic Co is 1.25 times less risky than Samwha Electronics. It trades about 0.28 of its potential returns per unit of risk. Samwha Electronics Co is currently generating about 0.08 per unit of risk. If you would invest 591,000 in Hironic Co on October 26, 2024 and sell it today you would earn a total of 66,000 from holding Hironic Co or generate 11.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hironic Co vs. Samwha Electronics Co
Performance |
Timeline |
Hironic |
Samwha Electronics |
Hironic and Samwha Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hironic and Samwha Electronics
The main advantage of trading using opposite Hironic and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hironic position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.Hironic vs. Ecoplastic | Hironic vs. Daejoo Electronic Materials | Hironic vs. Top Material Co | Hironic vs. Kolon Plastics |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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