Correlation Between Handok Clean and Aurora World
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Aurora World 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 Aurora World 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 Aurora World, you can compare the effects of market volatilities on Handok Clean and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Aurora World.
Diversification Opportunities for Handok Clean and Aurora World
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Handok and Aurora is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Handok Clean i.e., Handok Clean and Aurora World go up and down completely randomly.
Pair Corralation between Handok Clean and Aurora World
Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Aurora World. But the stock apears to be less risky and, when comparing its historical volatility, Handok Clean Tech is 1.21 times less risky than Aurora World. The stock trades about -0.08 of its potential returns per unit of risk. The Aurora World is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 703,000 in Aurora World on September 12, 2024 and sell it today you would lose (98,000) from holding Aurora World or give up 13.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.69% |
| Values | Daily Returns |
Handok Clean Tech vs. Aurora World
Performance |
| Timeline |
| Handok Clean Tech |
| Aurora World |
Handok Clean and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Aurora World
The main advantage of trading using opposite Handok Clean and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.| Handok Clean vs. Vitzro Tech Co | Handok Clean vs. Shinsung Delta Tech | Handok Clean vs. Orbitech Co | Handok Clean vs. Korea Information Engineering |
| Aurora World vs. Ssangyong Information Communication | Aurora World vs. PJ Metal Co | Aurora World vs. CG Hi Tech | Aurora World vs. Korea Computer |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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