Correlation Between Echomarketing CoLtd and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Hana Materials 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 Echomarketing CoLtd and Hana Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Hana Materials, you can compare the effects of market volatilities on Echomarketing CoLtd and Hana Materials 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 Echomarketing CoLtd with a short position of Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Hana Materials.
Diversification Opportunities for Echomarketing CoLtd and Hana Materials
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Echomarketing and Hana is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Hana Materials go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Hana Materials
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to generate 0.97 times more return on investment than Hana Materials. However, Echomarketing CoLtd is 1.03 times less risky than Hana Materials. It trades about 0.02 of its potential returns per unit of risk. Hana Materials is currently generating about -0.13 per unit of risk. If you would invest 972,000 in Echomarketing CoLtd on November 3, 2024 and sell it today you would earn a total of 9,000 from holding Echomarketing CoLtd or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echomarketing CoLtd vs. Hana Materials
Performance |
| Timeline |
| Echomarketing CoLtd |
| Hana Materials |
Echomarketing CoLtd and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echomarketing CoLtd and Hana Materials
The main advantage of trading using opposite Echomarketing CoLtd and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| Echomarketing CoLtd vs. AfreecaTV Co | Echomarketing CoLtd vs. Seegene | Echomarketing CoLtd vs. SS TECH | Echomarketing CoLtd vs. Ezwelfare Co |
| Hana Materials vs. ABCO Electronics Co | Hana Materials vs. Air Busan Co | Hana Materials vs. Daeduck Electronics Co | Hana Materials vs. Dongbang Transport Logistics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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