Correlation Between Hanjoo Light and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Jeju 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 Hanjoo Light and Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Hanjoo Light and Jeju 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 Hanjoo Light with a short position of Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Jeju Semiconductor.
Diversification Opportunities for Hanjoo Light and Jeju Semiconductor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanjoo and Jeju is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Hanjoo Light and Jeju Semiconductor
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to generate 0.87 times more return on investment than Jeju Semiconductor. However, Hanjoo Light Metal is 1.16 times less risky than Jeju Semiconductor. It trades about -0.32 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about -0.51 per unit of risk. If you would invest 99,000 in Hanjoo Light Metal on August 27, 2024 and sell it today you would lose (14,200) from holding Hanjoo Light Metal or give up 14.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| Hanjoo Light Metal |
| Jeju Semiconductor Corp |
Hanjoo Light and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Jeju Semiconductor
The main advantage of trading using opposite Hanjoo Light and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Jeju 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Hanjoo Light vs. TOPMATERIAL LTD | Hanjoo Light vs. Korea Shipbuilding Offshore | Hanjoo Light vs. Polaris Office Corp | Hanjoo Light vs. National Plastic Co |
| Jeju Semiconductor vs. Korea Real Estate | Jeju Semiconductor vs. Korea Ratings Co | Jeju Semiconductor vs. IQuest Co | Jeju Semiconductor vs. Wonbang Tech 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |