Correlation Between Handok Clean and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Handok Clean and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Korea Alcohol.
Diversification Opportunities for Handok Clean and Korea Alcohol
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Handok and Korea is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Handok Clean i.e., Handok Clean and Korea Alcohol go up and down completely randomly.
Pair Corralation between Handok Clean and Korea Alcohol
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 1.0 times more return on investment than Korea Alcohol. However, Handok Clean Tech is 1.0 times less risky than Korea Alcohol. It trades about -0.02 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.06 per unit of risk. If you would invest 641,450 in Handok Clean Tech on November 6, 2024 and sell it today you would lose (17,450) from holding Handok Clean Tech or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Handok Clean Tech |
| Korea Alcohol Industrial |
Handok Clean and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Korea Alcohol
The main advantage of trading using opposite Handok Clean and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Handok Clean vs. Inzi Display CoLtd | Handok Clean vs. BIT Computer Co | Handok Clean vs. Ssangyong Information Communication | Handok Clean vs. KCC Engineering Construction |
| Korea Alcohol vs. DB Financial Investment | Korea Alcohol vs. Innowireless Co | Korea Alcohol vs. TS Investment Corp | Korea Alcohol vs. SV Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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