Correlation Between Hanjoo Light and ATON
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and ATON 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 ATON 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 ATON Inc, you can compare the effects of market volatilities on Hanjoo Light and ATON 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 ATON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and ATON.
Diversification Opportunities for Hanjoo Light and ATON
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanjoo and ATON is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and ATON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATON Inc 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 ATON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATON Inc has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and ATON go up and down completely randomly.
Pair Corralation between Hanjoo Light and ATON
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the ATON. But the stock apears to be less risky and, when comparing its historical volatility, Hanjoo Light Metal is 2.53 times less risky than ATON. The stock trades about -0.24 of its potential returns per unit of risk. The ATON Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 540,000 in ATON Inc on September 25, 2024 and sell it today you would earn a total of 22,000 from holding ATON Inc or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. ATON Inc
Performance |
| Timeline |
| Hanjoo Light Metal |
| ATON Inc |
Hanjoo Light and ATON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and ATON
The main advantage of trading using opposite Hanjoo Light and ATON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, ATON 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 ATON will offset losses from the drop in ATON's long position.| Hanjoo Light vs. DAEDUCK ELECTRONICS CoLtd | Hanjoo Light vs. Sungmoon Electronics Co | Hanjoo Light vs. Automobile Pc | Hanjoo Light vs. Samji Electronics Co |
| ATON vs. Hanjoo Light Metal | ATON vs. Kukil Metal Co | ATON vs. Lake Materials Co | ATON vs. Samsung Publishing 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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