Correlation Between Hana Materials and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Neungyule Education 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 Neungyule Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Neungyule Education, you can compare the effects of market volatilities on Hana Materials and Neungyule Education 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 Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Neungyule Education.
Diversification Opportunities for Hana Materials and Neungyule Education
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and Neungyule is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education 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 Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of Hana Materials i.e., Hana Materials and Neungyule Education go up and down completely randomly.
Pair Corralation between Hana Materials and Neungyule Education
Assuming the 90 days trading horizon Hana Materials is expected to generate 0.97 times more return on investment than Neungyule Education. However, Hana Materials is 1.03 times less risky than Neungyule Education. It trades about 0.22 of its potential returns per unit of risk. Neungyule Education is currently generating about 0.19 per unit of risk. If you would invest 2,270,000 in Hana Materials on October 11, 2024 and sell it today you would earn a total of 355,000 from holding Hana Materials or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Neungyule Education
Performance |
| Timeline |
| Hana Materials |
| Neungyule Education |
Hana Materials and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Neungyule Education
The main advantage of trading using opposite Hana Materials and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| Hana Materials vs. Seah Steel Corp | Hana Materials vs. DB Financial Investment | Hana Materials vs. J Steel Co | Hana Materials vs. KTB Investment Securities |
| Neungyule Education vs. Sangsin Energy Display | Neungyule Education vs. Hanjin Transportation Co | Neungyule Education vs. TOPMATERIAL LTD | Neungyule Education vs. Hana Materials |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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