Correlation Between Hana Materials and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Chorokbaem Healthcare 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 Chorokbaem Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Chorokbaem Healthcare Co, you can compare the effects of market volatilities on Hana Materials and Chorokbaem Healthcare 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Chorokbaem Healthcare.
Diversification Opportunities for Hana Materials and Chorokbaem Healthcare
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hana and Chorokbaem is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of Hana Materials i.e., Hana Materials and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between Hana Materials and Chorokbaem Healthcare
Assuming the 90 days trading horizon Hana Materials is expected to generate 1.14 times more return on investment than Chorokbaem Healthcare. However, Hana Materials is 1.14 times more volatile than Chorokbaem Healthcare Co. It trades about -0.17 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about -0.24 per unit of risk. If you would invest 2,575,000 in Hana Materials on September 13, 2024 and sell it today you would lose (235,000) from holding Hana Materials or give up 9.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| Hana Materials |
| Chorokbaem Healthcare |
Hana Materials and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Chorokbaem Healthcare
The main advantage of trading using opposite Hana Materials and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| Hana Materials vs. Chorokbaem Healthcare Co | Hana Materials vs. Fine Besteel Co | Hana Materials vs. CKH Food Health | Hana Materials vs. Finebesteel |
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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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