Correlation Between Handok Clean and Air Busan
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Handok Clean and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Air Busan.
Diversification Opportunities for Handok Clean and Air Busan
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Handok and Air is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Handok Clean i.e., Handok Clean and Air Busan go up and down completely randomly.
Pair Corralation between Handok Clean and Air Busan
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 1.01 times more return on investment than Air Busan. However, Handok Clean is 1.01 times more volatile than Air Busan Co. It trades about 0.49 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.05 per unit of risk. If you would invest 578,073 in Handok Clean Tech on October 12, 2024 and sell it today you would earn a total of 67,927 from holding Handok Clean Tech or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Air Busan Co
Performance |
| Timeline |
| Handok Clean Tech |
| Air Busan |
Handok Clean and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Air Busan
The main advantage of trading using opposite Handok Clean and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Handok Clean vs. Heungkuk Metaltech CoLtd | Handok Clean vs. Seoul Electronics Telecom | Handok Clean vs. Kbi Metal Co | Handok Clean vs. Hyundai Home Shopping |
| Air Busan vs. LAKE MATERIALS LTD | Air Busan vs. PI Advanced Materials | Air Busan vs. Handok Clean Tech | Air Busan vs. RF Materials 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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