Correlation Between Hanjoo Light and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and DONGKUK TED 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 DONGKUK TED 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 DONGKUK TED METAL, you can compare the effects of market volatilities on Hanjoo Light and DONGKUK TED 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 DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and DONGKUK TED.
Diversification Opportunities for Hanjoo Light and DONGKUK TED
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjoo and DONGKUK is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and DONGKUK TED go up and down completely randomly.
Pair Corralation between Hanjoo Light and DONGKUK TED
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to generate 1.4 times more return on investment than DONGKUK TED. However, Hanjoo Light is 1.4 times more volatile than DONGKUK TED METAL. It trades about 0.08 of its potential returns per unit of risk. DONGKUK TED METAL is currently generating about -0.18 per unit of risk. If you would invest 77,600 in Hanjoo Light Metal on November 9, 2024 and sell it today you would earn a total of 1,600 from holding Hanjoo Light Metal or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. DONGKUK TED METAL
Performance |
| Timeline |
| Hanjoo Light Metal |
| DONGKUK TED METAL |
Hanjoo Light and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and DONGKUK TED
The main advantage of trading using opposite Hanjoo Light and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED'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 |
| DONGKUK TED vs. Kolon Plastics | DONGKUK TED vs. RF Materials Co | DONGKUK TED vs. LAKE MATERIALS LTD | DONGKUK TED vs. ABOV Semiconductor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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