Correlation Between Hanjoo Light and Namhae Chemical
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Namhae Chemical 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 Hanjoo Light and Namhae Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Namhae Chemical, you can compare the effects of market volatilities on Hanjoo Light and Namhae Chemical 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 Hanjoo Light with a short position of Namhae Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Namhae Chemical.
Diversification Opportunities for Hanjoo Light and Namhae Chemical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjoo and Namhae is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Namhae Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhae Chemical and Hanjoo Light 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 Hanjoo Light Metal are associated (or correlated) with Namhae Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhae Chemical has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Namhae Chemical go up and down completely randomly.
Pair Corralation between Hanjoo Light and Namhae Chemical
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Namhae Chemical. In addition to that, Hanjoo Light is 3.18 times more volatile than Namhae Chemical. It trades about -0.05 of its total potential returns per unit of risk. Namhae Chemical is currently generating about -0.04 per unit of volatility. If you would invest 909,514 in Namhae Chemical on November 27, 2024 and sell it today you would lose (241,514) from holding Namhae Chemical or give up 26.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Namhae Chemical
Performance |
| Timeline |
| Hanjoo Light Metal |
| Namhae Chemical |
Hanjoo Light and Namhae Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Namhae Chemical
The main advantage of trading using opposite Hanjoo Light and Namhae Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Namhae Chemical 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 Namhae Chemical will offset losses from the drop in Namhae Chemical's long position.| Hanjoo Light vs. InnoTherapy | Hanjoo Light vs. Aprogen Healthcare Games | Hanjoo Light vs. Chorokbaem Healthcare Co | Hanjoo Light vs. INFINITT Healthcare Co |
| Namhae Chemical vs. Aprogen Healthcare Games | Namhae Chemical vs. Jeju Bank | Namhae Chemical vs. Dgb Financial | Namhae Chemical vs. Dongbu Insurance Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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