Correlation Between Hanjoo Light and Company K
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Company K 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 Company K 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 Company K Partners, you can compare the effects of market volatilities on Hanjoo Light and Company K 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 Company K. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Company K.
Diversification Opportunities for Hanjoo Light and Company K
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanjoo and Company is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Company K Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Company K Partners 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 Company K. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Company K Partners has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Company K go up and down completely randomly.
Pair Corralation between Hanjoo Light and Company K
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Company K. But the stock apears to be less risky and, when comparing its historical volatility, Hanjoo Light Metal is 1.19 times less risky than Company K. The stock trades about -0.09 of its potential returns per unit of risk. The Company K Partners is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 510,000 in Company K Partners on October 26, 2024 and sell it today you would lose (19,500) from holding Company K Partners or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Company K Partners
Performance |
| Timeline |
| Hanjoo Light Metal |
| Company K Partners |
Hanjoo Light and Company K Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Company K
The main advantage of trading using opposite Hanjoo Light and Company K positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Company K 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 Company K will offset losses from the drop in Company K'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 |
| Company K vs. Nable Communications | Company K vs. Seoyon Topmetal Co | Company K vs. Hanjoo Light Metal | Company K vs. Sempio Foods 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |