Correlation Between Hana Materials and SEOHAN Const
Can any of the company-specific risk be diversified away by investing in both Hana Materials and SEOHAN Const 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 SEOHAN Const into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and SEOHAN Const EngcoLtd, you can compare the effects of market volatilities on Hana Materials and SEOHAN Const 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 SEOHAN Const. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and SEOHAN Const.
Diversification Opportunities for Hana Materials and SEOHAN Const
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and SEOHAN is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and SEOHAN Const EngcoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOHAN Const EngcoLtd 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 SEOHAN Const. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOHAN Const EngcoLtd has no effect on the direction of Hana Materials i.e., Hana Materials and SEOHAN Const go up and down completely randomly.
Pair Corralation between Hana Materials and SEOHAN Const
Assuming the 90 days trading horizon Hana Materials is expected to generate 2.03 times more return on investment than SEOHAN Const. However, Hana Materials is 2.03 times more volatile than SEOHAN Const EngcoLtd. It trades about -0.01 of its potential returns per unit of risk. SEOHAN Const EngcoLtd is currently generating about -0.04 per unit of risk. If you would invest 3,536,537 in Hana Materials on September 4, 2024 and sell it today you would lose (1,251,537) from holding Hana Materials or give up 35.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. SEOHAN Const EngcoLtd
Performance |
| Timeline |
| Hana Materials |
| SEOHAN Const EngcoLtd |
Hana Materials and SEOHAN Const Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and SEOHAN Const
The main advantage of trading using opposite Hana Materials and SEOHAN Const positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, SEOHAN Const 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 SEOHAN Const will offset losses from the drop in SEOHAN Const's long position.| Hana Materials vs. SK Hynix | Hana Materials vs. LX Semicon Co | Hana Materials vs. Tokai Carbon Korea | Hana Materials vs. People Technology |
| SEOHAN Const vs. Dongbu Insurance Co | SEOHAN Const vs. Kukdo Chemical Co | SEOHAN Const vs. Posco Chemical Co | SEOHAN Const vs. Namhae Chemical |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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