Correlation Between Handok Clean and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech Co, you can compare the effects of market volatilities on Handok Clean and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Lion Chemtech.
Diversification Opportunities for Handok Clean and Lion Chemtech
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Handok and Lion is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Handok Clean i.e., Handok Clean and Lion Chemtech go up and down completely randomly.
Pair Corralation between Handok Clean and Lion Chemtech
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 0.49 times more return on investment than Lion Chemtech. However, Handok Clean Tech is 2.04 times less risky than Lion Chemtech. It trades about -0.06 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about -0.09 per unit of risk. If you would invest 850,124 in Handok Clean Tech on August 28, 2024 and sell it today you would lose (208,124) from holding Handok Clean Tech or give up 24.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Handok Clean Tech vs. Lion Chemtech Co
Performance |
| Timeline |
| Handok Clean Tech |
| Lion Chemtech |
Handok Clean and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Lion Chemtech
The main advantage of trading using opposite Handok Clean and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. UNISEM Co |
| Lion Chemtech vs. Moonbae Steel | Lion Chemtech vs. Fine Besteel Co | Lion Chemtech vs. J Steel Co | Lion Chemtech vs. DONGKUK STEEL MILL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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