Correlation Between Hanjoo Light and EV Advanced
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and EV Advanced 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 EV Advanced 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 EV Advanced Material, you can compare the effects of market volatilities on Hanjoo Light and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and EV Advanced.
Diversification Opportunities for Hanjoo Light and EV Advanced
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjoo and 131400 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and EV Advanced go up and down completely randomly.
Pair Corralation between Hanjoo Light and EV Advanced
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the EV Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Hanjoo Light Metal is 1.09 times less risky than EV Advanced. The stock trades about -0.11 of its potential returns per unit of risk. The EV Advanced Material is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 344,500 in EV Advanced Material on August 25, 2024 and sell it today you would lose (134,000) from holding EV Advanced Material or give up 38.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. EV Advanced Material
Performance |
| Timeline |
| Hanjoo Light Metal |
| EV Advanced Material |
Hanjoo Light and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and EV Advanced
The main advantage of trading using opposite Hanjoo Light and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| Hanjoo Light vs. Jeju Air Co | Hanjoo Light vs. Bohae Brewery | Hanjoo Light vs. InfoBank | Hanjoo Light vs. Lotte Non Life Insurance |
| EV Advanced vs. Display Tech Co | EV Advanced vs. Lion Chemtech Co | EV Advanced vs. Amogreentech Co | EV Advanced vs. Vitzro 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |