Correlation Between Hana Materials and Tamul Multimedia
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Tamul Multimedia 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 Tamul Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Tamul Multimedia Co, you can compare the effects of market volatilities on Hana Materials and Tamul Multimedia 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 Tamul Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Tamul Multimedia.
Diversification Opportunities for Hana Materials and Tamul Multimedia
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Tamul is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Tamul Multimedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamul Multimedia 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 Tamul Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamul Multimedia has no effect on the direction of Hana Materials i.e., Hana Materials and Tamul Multimedia go up and down completely randomly.
Pair Corralation between Hana Materials and Tamul Multimedia
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Tamul Multimedia. But the stock apears to be less risky and, when comparing its historical volatility, Hana Materials is 1.27 times less risky than Tamul Multimedia. The stock trades about -0.01 of its potential returns per unit of risk. The Tamul Multimedia Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 398,000 in Tamul Multimedia Co on August 25, 2024 and sell it today you would earn a total of 33,500 from holding Tamul Multimedia Co or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Tamul Multimedia Co
Performance |
| Timeline |
| Hana Materials |
| Tamul Multimedia |
Hana Materials and Tamul Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Tamul Multimedia
The main advantage of trading using opposite Hana Materials and Tamul Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Tamul Multimedia 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 Tamul Multimedia will offset losses from the drop in Tamul Multimedia's long position.| Hana Materials vs. PJ Metal Co | Hana Materials vs. Dongil Metal Co | Hana Materials vs. Dongwon Metal Co | Hana Materials vs. Daou Technology |
| Tamul Multimedia vs. SK Hynix | Tamul Multimedia vs. People Technology | Tamul Multimedia vs. SIMMTECH Co | Tamul Multimedia vs. Haesung DS Co |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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