Correlation Between Hana Materials and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both Hana Materials and MEDIPOST 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 MEDIPOST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and MEDIPOST Co, you can compare the effects of market volatilities on Hana Materials and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and MEDIPOST.
Diversification Opportunities for Hana Materials and MEDIPOST
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hana and MEDIPOST is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of Hana Materials i.e., Hana Materials and MEDIPOST go up and down completely randomly.
Pair Corralation between Hana Materials and MEDIPOST
Assuming the 90 days trading horizon Hana Materials is expected to generate 1.46 times less return on investment than MEDIPOST. But when comparing it to its historical volatility, Hana Materials is 2.51 times less risky than MEDIPOST. It trades about 0.27 of its potential returns per unit of risk. MEDIPOST Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 935,000 in MEDIPOST Co on October 11, 2024 and sell it today you would earn a total of 205,000 from holding MEDIPOST Co or generate 21.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hana Materials vs. MEDIPOST Co
Performance |
| Timeline |
| Hana Materials |
| MEDIPOST |
Hana Materials and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and MEDIPOST
The main advantage of trading using opposite Hana Materials and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST'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 |
| MEDIPOST vs. Hana Materials | MEDIPOST vs. Tamul Multimedia Co | MEDIPOST vs. DC Media Co | MEDIPOST vs. Next Entertainment World |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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