Correlation Between Hana Materials and Top Material
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Top Material 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 Top Material into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Top Material Co, you can compare the effects of market volatilities on Hana Materials and Top Material 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 Top Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Top Material.
Diversification Opportunities for Hana Materials and Top Material
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hana and Top is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Top Material Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Material 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 Top Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Material has no effect on the direction of Hana Materials i.e., Hana Materials and Top Material go up and down completely randomly.
Pair Corralation between Hana Materials and Top Material
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Top Material. But the stock apears to be less risky and, when comparing its historical volatility, Hana Materials is 1.46 times less risky than Top Material. The stock trades about -0.01 of its potential returns per unit of risk. The Top Material Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,569,179 in Top Material Co on August 25, 2024 and sell it today you would lose (1,459,179) from holding Top Material Co or give up 31.94% 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. Top Material Co
Performance |
| Timeline |
| Hana Materials |
| Top Material |
Hana Materials and Top Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Top Material
The main advantage of trading using opposite Hana Materials and Top Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Top Material 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 Top Material will offset losses from the drop in Top Material'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 |
| Top Material vs. Tuksu Engineering ConstructionLtd | Top Material vs. Polaris Office Corp | Top Material vs. Daekyung Machinery Engineering | Top Material vs. ENERGYMACHINERY KOREA CoLtd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |