Correlation Between Hanjoo Light and SNTEnergy
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and SNTEnergy 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 SNTEnergy 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 SNTEnergy Co, you can compare the effects of market volatilities on Hanjoo Light and SNTEnergy 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 SNTEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and SNTEnergy.
Diversification Opportunities for Hanjoo Light and SNTEnergy
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanjoo and SNTEnergy is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and SNTEnergy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNTEnergy 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 SNTEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNTEnergy has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and SNTEnergy go up and down completely randomly.
Pair Corralation between Hanjoo Light and SNTEnergy
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the SNTEnergy. But the stock apears to be less risky and, when comparing its historical volatility, Hanjoo Light Metal is 1.11 times less risky than SNTEnergy. The stock trades about -0.1 of its potential returns per unit of risk. The SNTEnergy Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 692,724 in SNTEnergy Co on September 12, 2024 and sell it today you would earn a total of 933,276 from holding SNTEnergy Co or generate 134.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Hanjoo Light Metal vs. SNTEnergy Co
Performance |
| Timeline |
| Hanjoo Light Metal |
| SNTEnergy |
Hanjoo Light and SNTEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and SNTEnergy
The main advantage of trading using opposite Hanjoo Light and SNTEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, SNTEnergy 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 SNTEnergy will offset losses from the drop in SNTEnergy'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 |
| SNTEnergy vs. Atinum Investment Co | SNTEnergy vs. Stic Investments | SNTEnergy vs. Daiyang Metal Co | SNTEnergy vs. Hanjoo Light Metal |
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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