Correlation Between Handok Clean and Hwasung Industrial
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Hwasung Industrial 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 Handok Clean and Hwasung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Hwasung Industrial Co, you can compare the effects of market volatilities on Handok Clean and Hwasung Industrial 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 Handok Clean with a short position of Hwasung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Hwasung Industrial.
Diversification Opportunities for Handok Clean and Hwasung Industrial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Handok and Hwasung is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Hwasung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwasung Industrial and Handok Clean 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 Handok Clean Tech are associated (or correlated) with Hwasung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwasung Industrial has no effect on the direction of Handok Clean i.e., Handok Clean and Hwasung Industrial go up and down completely randomly.
Pair Corralation between Handok Clean and Hwasung Industrial
Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Hwasung Industrial. In addition to that, Handok Clean is 1.25 times more volatile than Hwasung Industrial Co. It trades about -0.01 of its total potential returns per unit of risk. Hwasung Industrial Co is currently generating about 0.0 per unit of volatility. If you would invest 985,735 in Hwasung Industrial Co on October 14, 2024 and sell it today you would lose (33,735) from holding Hwasung Industrial Co or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Hwasung Industrial Co
Performance |
| Timeline |
| Handok Clean Tech |
| Hwasung Industrial |
Handok Clean and Hwasung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Hwasung Industrial
The main advantage of trading using opposite Handok Clean and Hwasung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Hwasung Industrial 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 Hwasung Industrial will offset losses from the drop in Hwasung Industrial's long position.| Handok Clean vs. Hanjoo Light Metal | Handok Clean vs. Kbi Metal Co | Handok Clean vs. Daiyang Metal Co | Handok Clean vs. SungMoon Electronics Co |
| Hwasung Industrial vs. Songwon Industrial Co | Hwasung Industrial vs. ABOV Semiconductor Co | Hwasung Industrial vs. Handok Clean Tech | Hwasung Industrial vs. Cheryong Industrial CoLtd |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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