Correlation Between Hana Materials and Aprogen KIC
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Aprogen KIC 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 Hana Materials and Aprogen KIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Aprogen KIC, you can compare the effects of market volatilities on Hana Materials and Aprogen KIC 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 Hana Materials with a short position of Aprogen KIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Aprogen KIC.
Diversification Opportunities for Hana Materials and Aprogen KIC
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Aprogen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Aprogen KIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen KIC and Hana Materials 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 Hana Materials are associated (or correlated) with Aprogen KIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen KIC has no effect on the direction of Hana Materials i.e., Hana Materials and Aprogen KIC go up and down completely randomly.
Pair Corralation between Hana Materials and Aprogen KIC
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Aprogen KIC. But the stock apears to be less risky and, when comparing its historical volatility, Hana Materials is 1.19 times less risky than Aprogen KIC. The stock trades about -0.31 of its potential returns per unit of risk. The Aprogen KIC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 111,500 in Aprogen KIC on August 29, 2024 and sell it today you would earn a total of 8,900 from holding Aprogen KIC or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Aprogen KIC
Performance |
| Timeline |
| Hana Materials |
| Aprogen KIC |
Hana Materials and Aprogen KIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Aprogen KIC
The main advantage of trading using opposite Hana Materials and Aprogen KIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Aprogen KIC 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 Aprogen KIC will offset losses from the drop in Aprogen KIC's long position.| Hana Materials vs. Air Busan Co | Hana Materials vs. Daelim Trading Co | Hana Materials vs. Korea Air Svc | Hana Materials vs. SBI Investment KOREA |
| Aprogen KIC vs. Hana Materials | Aprogen KIC vs. Miwon Chemical | Aprogen KIC vs. Top Material Co | Aprogen KIC vs. Kukdo Chemical 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |