Correlation Between Handok Clean and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Handok Clean and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Bosung Power.
Diversification Opportunities for Handok Clean and Bosung Power
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Handok and Bosung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Handok Clean i.e., Handok Clean and Bosung Power go up and down completely randomly.
Pair Corralation between Handok Clean and Bosung Power
Assuming the 90 days trading horizon Handok Clean is expected to generate 4.52 times less return on investment than Bosung Power. But when comparing it to its historical volatility, Handok Clean Tech is 1.12 times less risky than Bosung Power. It trades about 0.12 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 255,000 in Bosung Power Technology on October 30, 2024 and sell it today you would earn a total of 54,000 from holding Bosung Power Technology or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Bosung Power Technology
Performance |
| Timeline |
| Handok Clean Tech |
| Bosung Power Technology |
Handok Clean and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Bosung Power
The main advantage of trading using opposite Handok Clean and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Handok Clean vs. SAMG Entertainment Co | Handok Clean vs. Korea Information Communications | Handok Clean vs. Lotte Rental Co | Handok Clean vs. Ssangyong Information Communication |
| Bosung Power vs. TJ media Co | Bosung Power vs. SKONEC Entertainment Co | Bosung Power vs. Samlip General Foods | Bosung Power vs. MEDIANA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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