Correlation Between N2Tech and Hanmi Semiconductor
Can any of the company-specific risk be diversified away by investing in both N2Tech and Hanmi Semiconductor 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 N2Tech and Hanmi Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N2Tech Co and Hanmi Semiconductor Co, you can compare the effects of market volatilities on N2Tech and Hanmi Semiconductor 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 N2Tech with a short position of Hanmi Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of N2Tech and Hanmi Semiconductor.
Diversification Opportunities for N2Tech and Hanmi Semiconductor
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between N2Tech and Hanmi is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding N2Tech Co and Hanmi Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semiconductor and N2Tech 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 N2Tech Co are associated (or correlated) with Hanmi Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semiconductor has no effect on the direction of N2Tech i.e., N2Tech and Hanmi Semiconductor go up and down completely randomly.
Pair Corralation between N2Tech and Hanmi Semiconductor
Assuming the 90 days trading horizon N2Tech is expected to generate 35.97 times less return on investment than Hanmi Semiconductor. But when comparing it to its historical volatility, N2Tech Co is 3.71 times less risky than Hanmi Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Hanmi Semiconductor Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 8,320,000 in Hanmi Semiconductor Co on October 28, 2024 and sell it today you would earn a total of 3,740,000 from holding Hanmi Semiconductor Co or generate 44.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
N2Tech Co vs. Hanmi Semiconductor Co
Performance |
| Timeline |
| N2Tech |
| Hanmi Semiconductor |
N2Tech and Hanmi Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N2Tech and Hanmi Semiconductor
The main advantage of trading using opposite N2Tech and Hanmi Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N2Tech position performs unexpectedly, Hanmi Semiconductor 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 Hanmi Semiconductor will offset losses from the drop in Hanmi Semiconductor's long position.The idea behind N2Tech Co and Hanmi Semiconductor Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hanmi Semiconductor vs. Hyundai Engineering Construction | Hanmi Semiconductor vs. SEOJEON ELECTRIC MACHINERY | Hanmi Semiconductor vs. ENERGYMACHINERY KOREA CoLtd | Hanmi Semiconductor vs. Genie Music |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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