Correlation Between SEOJEON ELECTRIC and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Hanmi Semiconductor 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 SEOJEON ELECTRIC and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and Hanmi Semiconductor Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Hanmi Semiconductor 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 SEOJEON ELECTRIC with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Hanmi Semiconductor.
Diversification Opportunities for SEOJEON ELECTRIC and Hanmi Semiconductor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEOJEON and Hanmi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY are associated (or correlated) with Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Hanmi Semiconductor
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 0.92 times more return on investment than Hanmi Semiconductor. However, SEOJEON ELECTRIC MACHINERY is 1.09 times less risky than Hanmi Semiconductor. It trades about 0.22 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about 0.16 per unit of risk. If you would invest 402,000 in SEOJEON ELECTRIC MACHINERY on November 6, 2024 and sell it today you would earn a total of 72,500 from holding SEOJEON ELECTRIC MACHINERY or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Hanmi Semiconductor |
SEOJEON ELECTRIC and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Hanmi Semiconductor
The main advantage of trading using opposite SEOJEON ELECTRIC and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.| SEOJEON ELECTRIC vs. Air Busan Co | SEOJEON ELECTRIC vs. Youngsin Metal Industrial | SEOJEON ELECTRIC vs. Infinitt Healthcare Co | SEOJEON ELECTRIC vs. Kbi Metal Co |
| Hanmi Semiconductor vs. Kukdong Oil Chemicals | Hanmi Semiconductor vs. SK Chemicals Co | Hanmi Semiconductor vs. Woori Technology Investment | Hanmi Semiconductor vs. Daejung Chemicals Metals |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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