Correlation Between Hana Materials and LX Semicon
Can any of the company-specific risk be diversified away by investing in both Hana Materials and LX Semicon 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 LX Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and LX Semicon Co, you can compare the effects of market volatilities on Hana Materials and LX Semicon 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 LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and LX Semicon.
Diversification Opportunities for Hana Materials and LX Semicon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hana and 108320 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon 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 LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of Hana Materials i.e., Hana Materials and LX Semicon go up and down completely randomly.
Pair Corralation between Hana Materials and LX Semicon
Assuming the 90 days trading horizon Hana Materials is expected to generate 1.78 times more return on investment than LX Semicon. However, Hana Materials is 1.78 times more volatile than LX Semicon Co. It trades about 0.17 of its potential returns per unit of risk. LX Semicon Co is currently generating about 0.17 per unit of risk. If you would invest 2,415,000 in Hana Materials on October 25, 2024 and sell it today you would earn a total of 255,000 from holding Hana Materials or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. LX Semicon Co
Performance |
| Timeline |
| Hana Materials |
| LX Semicon |
Hana Materials and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and LX Semicon
The main advantage of trading using opposite Hana Materials and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| Hana Materials vs. SK Hynix | Hana Materials vs. LX Semicon Co | Hana Materials vs. Tokai Carbon Korea | Hana Materials vs. People Technology |
| LX Semicon vs. Daishin Information Communications | LX Semicon vs. Lotte Data Communication | LX Semicon vs. LG Household Healthcare | LX Semicon vs. EBEST Investment Securities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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