Correlation Between Nable Communications and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Hanjoo Light 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 Nable Communications and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Hanjoo Light Metal, you can compare the effects of market volatilities on Nable Communications and Hanjoo Light 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 Nable Communications with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Hanjoo Light.
Diversification Opportunities for Nable Communications and Hanjoo Light
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nable and Hanjoo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and Nable Communications 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 Nable Communications are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Nable Communications i.e., Nable Communications and Hanjoo Light go up and down completely randomly.
Pair Corralation between Nable Communications and Hanjoo Light
Assuming the 90 days trading horizon Nable Communications is expected to generate 0.32 times more return on investment than Hanjoo Light. However, Nable Communications is 3.16 times less risky than Hanjoo Light. It trades about -0.05 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.1 per unit of risk. If you would invest 809,000 in Nable Communications on August 28, 2024 and sell it today you would lose (164,000) from holding Nable Communications or give up 20.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Nable Communications vs. Hanjoo Light Metal
Performance |
| Timeline |
| Nable Communications |
| Hanjoo Light Metal |
Nable Communications and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Hanjoo Light
The main advantage of trading using opposite Nable Communications and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Nable Communications vs. Korea Real Estate | Nable Communications vs. Korea Ratings Co | Nable Communications vs. IQuest Co | Nable Communications vs. Wonbang Tech Co |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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