Correlation Between Hana Materials and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Kukdo Chemical 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 Kukdo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Kukdo Chemical Co, you can compare the effects of market volatilities on Hana Materials and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Kukdo Chemical.
Diversification Opportunities for Hana Materials and Kukdo Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Kukdo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Hana Materials i.e., Hana Materials and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Hana Materials and Kukdo Chemical
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Kukdo Chemical. In addition to that, Hana Materials is 1.49 times more volatile than Kukdo Chemical Co. It trades about -0.31 of its total potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.28 per unit of volatility. If you would invest 3,365,000 in Kukdo Chemical Co on August 29, 2024 and sell it today you would lose (350,000) from holding Kukdo Chemical Co or give up 10.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hana Materials vs. Kukdo Chemical Co
Performance |
| Timeline |
| Hana Materials |
| Kukdo Chemical |
Hana Materials and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Kukdo Chemical
The main advantage of trading using opposite Hana Materials and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical'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 |
| Kukdo Chemical vs. AptaBio Therapeutics | Kukdo Chemical vs. Daewoo SBI SPAC | Kukdo Chemical vs. Dream Security co | Kukdo Chemical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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