Correlation Between PI Advanced and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both PI Advanced and Hanjin Transportation 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 PI Advanced and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and Hanjin Transportation Co, you can compare the effects of market volatilities on PI Advanced and Hanjin Transportation 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 PI Advanced with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and Hanjin Transportation.
Diversification Opportunities for PI Advanced and Hanjin Transportation
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 178920 and Hanjin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and PI Advanced 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 PI Advanced Materials are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of PI Advanced i.e., PI Advanced and Hanjin Transportation go up and down completely randomly.
Pair Corralation between PI Advanced and Hanjin Transportation
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the Hanjin Transportation. In addition to that, PI Advanced is 3.4 times more volatile than Hanjin Transportation Co. It trades about -0.17 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about -0.02 per unit of volatility. If you would invest 1,915,000 in Hanjin Transportation Co on September 2, 2024 and sell it today you would lose (15,000) from holding Hanjin Transportation Co or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. Hanjin Transportation Co
Performance |
| Timeline |
| PI Advanced Materials |
| Hanjin Transportation |
PI Advanced and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and Hanjin Transportation
The main advantage of trading using opposite PI Advanced and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| PI Advanced vs. Samsung Electronics Co | PI Advanced vs. Samsung Electronics Co | PI Advanced vs. LG Energy Solution | PI Advanced vs. SK Hynix |
| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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