Correlation Between Handok Clean and Formetal
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Handok Clean and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Formetal.
Diversification Opportunities for Handok Clean and Formetal
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Handok and Formetal is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Handok Clean i.e., Handok Clean and Formetal go up and down completely randomly.
Pair Corralation between Handok Clean and Formetal
Assuming the 90 days trading horizon Handok Clean is expected to generate 1.37 times less return on investment than Formetal. But when comparing it to its historical volatility, Handok Clean Tech is 3.54 times less risky than Formetal. It trades about 0.46 of its potential returns per unit of risk. Formetal Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 311,192 in Formetal Co on October 15, 2024 and sell it today you would earn a total of 40,808 from holding Formetal Co or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Formetal Co
Performance |
| Timeline |
| Handok Clean Tech |
| Formetal |
Handok Clean and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Formetal
The main advantage of trading using opposite Handok Clean and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal'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 |
| Formetal vs. Dongil Metal Co | Formetal vs. Cheryong Industrial CoLtd | Formetal vs. Industrial Bank | Formetal vs. Hyundai Industrial Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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