Correlation Between Hana Materials and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Hana Materials and ChipsMedia 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 ChipsMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and ChipsMedia, you can compare the effects of market volatilities on Hana Materials and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and ChipsMedia.
Diversification Opportunities for Hana Materials and ChipsMedia
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and ChipsMedia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Hana Materials i.e., Hana Materials and ChipsMedia go up and down completely randomly.
Pair Corralation between Hana Materials and ChipsMedia
Assuming the 90 days trading horizon Hana Materials is expected to generate 2.18 times less return on investment than ChipsMedia. But when comparing it to its historical volatility, Hana Materials is 1.55 times less risky than ChipsMedia. It trades about 0.13 of its potential returns per unit of risk. ChipsMedia is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,357,000 in ChipsMedia on October 30, 2024 and sell it today you would earn a total of 491,000 from holding ChipsMedia or generate 36.18% 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. ChipsMedia
Performance |
| Timeline |
| Hana Materials |
| ChipsMedia |
Hana Materials and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and ChipsMedia
The main advantage of trading using opposite Hana Materials and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Hana Materials vs. Jeju Air Co | Hana Materials vs. LG Display Co | Hana Materials vs. Duksan Hi Metal | Hana Materials vs. Korea Air Svc |
| ChipsMedia vs. Nice Information Telecommunication | ChipsMedia vs. Spolytech Co | ChipsMedia vs. Dongbang Transport Logistics | ChipsMedia vs. Narae Nanotech Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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