Correlation Between Hanjoo Light and Value Added
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Value Added 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 Value Added 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 Value Added Technology, you can compare the effects of market volatilities on Hanjoo Light and Value Added 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 Value Added. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Value Added.
Diversification Opportunities for Hanjoo Light and Value Added
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanjoo and Value is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Value Added Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Added Technology 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 Value Added. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Added Technology has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Value Added go up and down completely randomly.
Pair Corralation between Hanjoo Light and Value Added
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Value Added. In addition to that, Hanjoo Light is 1.16 times more volatile than Value Added Technology. It trades about -0.34 of its total potential returns per unit of risk. Value Added Technology is currently generating about -0.26 per unit of volatility. If you would invest 2,285,000 in Value Added Technology on September 2, 2024 and sell it today you would lose (245,000) from holding Value Added Technology or give up 10.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Value Added Technology
Performance |
| Timeline |
| Hanjoo Light Metal |
| Value Added Technology |
Hanjoo Light and Value Added Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Value Added
The main advantage of trading using opposite Hanjoo Light and Value Added positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Value Added 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 Value Added will offset losses from the drop in Value Added's long position.| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
| Value Added vs. AptaBio Therapeutics | Value Added vs. KT Hitel | Value Added vs. SillaJen | Value Added vs. Cytogen |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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