Correlation Between Hana Materials and Orbitech
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Orbitech 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 Orbitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Orbitech Co, you can compare the effects of market volatilities on Hana Materials and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Orbitech.
Diversification Opportunities for Hana Materials and Orbitech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hana and Orbitech is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Hana Materials i.e., Hana Materials and Orbitech go up and down completely randomly.
Pair Corralation between Hana Materials and Orbitech
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Orbitech. But the stock apears to be less risky and, when comparing its historical volatility, Hana Materials is 1.09 times less risky than Orbitech. The stock trades about -0.31 of its potential returns per unit of risk. The Orbitech Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 241,000 in Orbitech Co on August 28, 2024 and sell it today you would earn a total of 2,000 from holding Orbitech Co or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Orbitech Co
Performance |
| Timeline |
| Hana Materials |
| Orbitech |
Hana Materials and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Orbitech
The main advantage of trading using opposite Hana Materials and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Hana Materials vs. SK Hynix | Hana Materials vs. People Technology | Hana Materials vs. SIMMTECH Co | Hana Materials vs. Haesung DS Co |
| Orbitech vs. Samsung Electronics Co | Orbitech vs. Samsung Electronics Co | Orbitech vs. Hyundai Motor Co | Orbitech vs. Hyundai Motor |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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