Correlation Between HuMC and Taewoong Logistics
Can any of the company-specific risk be diversified away by investing in both HuMC and Taewoong Logistics 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 HuMC and Taewoong Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HuMC Co and Taewoong Logistics CoLtd, you can compare the effects of market volatilities on HuMC and Taewoong Logistics 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 HuMC with a short position of Taewoong Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HuMC and Taewoong Logistics.
Diversification Opportunities for HuMC and Taewoong Logistics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HuMC and Taewoong is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding HuMC Co and Taewoong Logistics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taewoong Logistics CoLtd and HuMC 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 HuMC Co are associated (or correlated) with Taewoong Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taewoong Logistics CoLtd has no effect on the direction of HuMC i.e., HuMC and Taewoong Logistics go up and down completely randomly.
Pair Corralation between HuMC and Taewoong Logistics
Assuming the 90 days trading horizon HuMC Co is expected to generate 0.47 times more return on investment than Taewoong Logistics. However, HuMC Co is 2.14 times less risky than Taewoong Logistics. It trades about -0.09 of its potential returns per unit of risk. Taewoong Logistics CoLtd is currently generating about -0.05 per unit of risk. If you would invest 117,100 in HuMC Co on September 3, 2024 and sell it today you would lose (17,900) from holding HuMC Co or give up 15.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HuMC Co vs. Taewoong Logistics CoLtd
Performance |
| Timeline |
| HuMC |
| Taewoong Logistics CoLtd |
HuMC and Taewoong Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HuMC and Taewoong Logistics
The main advantage of trading using opposite HuMC and Taewoong Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HuMC position performs unexpectedly, Taewoong Logistics 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 Taewoong Logistics will offset losses from the drop in Taewoong Logistics' long position.The idea behind HuMC Co and Taewoong Logistics CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Taewoong Logistics vs. Daejung Chemicals Metals | Taewoong Logistics vs. Koryo Credit Information | Taewoong Logistics vs. Dgb Financial | Taewoong Logistics vs. Korean Reinsurance 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |