Correlation Between PlayD Co and Hancom
Can any of the company-specific risk be diversified away by investing in both PlayD Co and Hancom 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 PlayD Co and Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayD Co and Hancom Inc, you can compare the effects of market volatilities on PlayD Co and Hancom 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 PlayD Co with a short position of Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayD Co and Hancom.
Diversification Opportunities for PlayD Co and Hancom
Average diversification
The 3 months correlation between PlayD and Hancom is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PlayD Co and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc and PlayD Co 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 PlayD Co are associated (or correlated) with Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of PlayD Co i.e., PlayD Co and Hancom go up and down completely randomly.
Pair Corralation between PlayD Co and Hancom
Assuming the 90 days trading horizon PlayD Co is expected to generate 12.42 times less return on investment than Hancom. But when comparing it to its historical volatility, PlayD Co is 1.75 times less risky than Hancom. It trades about 0.02 of its potential returns per unit of risk. Hancom Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,911,000 in Hancom Inc on September 12, 2024 and sell it today you would earn a total of 289,000 from holding Hancom Inc or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayD Co vs. Hancom Inc
Performance |
| Timeline |
| PlayD Co |
| Hancom Inc |
PlayD Co and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayD Co and Hancom
The main advantage of trading using opposite PlayD Co and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayD Co position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| PlayD Co vs. Cube Entertainment | PlayD Co vs. Neungyule Education | PlayD Co vs. Solution Advanced Technology | PlayD Co vs. Busan Industrial Co |
| Hancom vs. Ssangyong Information Communication | Hancom vs. Automobile Pc | Hancom vs. PlayD Co | Hancom vs. Nable Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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