Correlation Between Moadata and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Moadata and Hanjin Transportation 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 Moadata and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moadata Co and Hanjin Transportation Co, you can compare the effects of market volatilities on Moadata and Hanjin Transportation 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 Moadata with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moadata and Hanjin Transportation.
Diversification Opportunities for Moadata and Hanjin Transportation
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Moadata and Hanjin is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Moadata Co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Moadata 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 Moadata Co are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Moadata i.e., Moadata and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Moadata and Hanjin Transportation
Assuming the 90 days trading horizon Moadata Co is expected to generate 5.56 times more return on investment than Hanjin Transportation. However, Moadata is 5.56 times more volatile than Hanjin Transportation Co. It trades about 0.11 of its potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.19 per unit of risk. If you would invest 129,700 in Moadata Co on November 2, 2024 and sell it today you would earn a total of 6,300 from holding Moadata Co or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moadata Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Moadata |
| Hanjin Transportation |
Moadata and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moadata and Hanjin Transportation
The main advantage of trading using opposite Moadata and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moadata position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Moadata vs. Dongbang Ship Machinery | Moadata vs. Hanil Chemical Ind | Moadata vs. Kg Chemical | Moadata vs. Dongnam Chemical Co |
| Hanjin Transportation vs. Dongwoo Farm To | Hanjin Transportation vs. Vitzro Tech Co | Hanjin Transportation vs. Seoam Machinery Industry | Hanjin Transportation vs. Woori Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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