Correlation Between Hanjoo Light and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech Co, you can compare the effects of market volatilities on Hanjoo Light and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Wonbang Tech.
Diversification Opportunities for Hanjoo Light and Wonbang Tech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjoo and Wonbang is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Wonbang Tech go up and down completely randomly.
Pair Corralation between Hanjoo Light and Wonbang Tech
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to generate 0.44 times more return on investment than Wonbang Tech. However, Hanjoo Light Metal is 2.28 times less risky than Wonbang Tech. It trades about 0.2 of its potential returns per unit of risk. Wonbang Tech Co is currently generating about 0.07 per unit of risk. If you would invest 78,800 in Hanjoo Light Metal on November 4, 2024 and sell it today you would earn a total of 3,300 from holding Hanjoo Light Metal or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Wonbang Tech Co
Performance |
| Timeline |
| Hanjoo Light Metal |
| Wonbang Tech |
Hanjoo Light and Wonbang Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Wonbang Tech
The main advantage of trading using opposite Hanjoo Light and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech's long position.| Hanjoo Light vs. Samyoung Electronics Co | Hanjoo Light vs. SungMoon Electronics Co | Hanjoo Light vs. Vissem Electronics Co | Hanjoo Light vs. Sungmoon Electronics Co |
| Wonbang Tech vs. Seohee Construction Co | Wonbang Tech vs. MediaZen | Wonbang Tech vs. Tuksu Engineering ConstructionLtd | Wonbang Tech vs. SEOJEON ELECTRIC MACHINERY |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world |