Correlation Between Handok Clean and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on Handok Clean and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Sewoon Medical.
Diversification Opportunities for Handok Clean and Sewoon Medical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Handok and Sewoon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Handok Clean i.e., Handok Clean and Sewoon Medical go up and down completely randomly.
Pair Corralation between Handok Clean and Sewoon Medical
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 1.06 times more return on investment than Sewoon Medical. However, Handok Clean is 1.06 times more volatile than Sewoon Medical Co. It trades about -0.01 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.01 per unit of risk. If you would invest 722,535 in Handok Clean Tech on October 20, 2024 and sell it today you would lose (72,535) from holding Handok Clean Tech or give up 10.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Sewoon Medical Co
Performance |
| Timeline |
| Handok Clean Tech |
| Sewoon Medical |
Handok Clean and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Sewoon Medical
The main advantage of trading using opposite Handok Clean and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| Handok Clean vs. Sewoon Medical Co | Handok Clean vs. Korean Air Lines | Handok Clean vs. RF Materials Co | Handok Clean vs. Korean Drug Co |
| Sewoon Medical vs. GS Retail Co | Sewoon Medical vs. LG Display Co | Sewoon Medical vs. Miwon Chemicals Co | Sewoon Medical vs. ChipsMedia |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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