Correlation Between Moadata and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Moadata and Hanjoo Light 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 Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moadata Co and Hanjoo Light Metal, you can compare the effects of market volatilities on Moadata and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moadata and Hanjoo Light.
Diversification Opportunities for Moadata and Hanjoo Light
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Moadata and Hanjoo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Moadata Co and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Moadata i.e., Moadata and Hanjoo Light go up and down completely randomly.
Pair Corralation between Moadata and Hanjoo Light
Assuming the 90 days trading horizon Moadata Co is expected to generate 0.95 times more return on investment than Hanjoo Light. However, Moadata Co is 1.05 times less risky than Hanjoo Light. It trades about -0.02 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.06 per unit of risk. If you would invest 318,000 in Moadata Co on August 30, 2024 and sell it today you would lose (160,900) from holding Moadata Co or give up 50.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.98% |
| Values | Daily Returns |
Moadata Co vs. Hanjoo Light Metal
Performance |
| Timeline |
| Moadata |
| Hanjoo Light Metal |
Moadata and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moadata and Hanjoo Light
The main advantage of trading using opposite Moadata and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moadata position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Moadata vs. Daiyang Metal Co | Moadata vs. DONGKUK TED METAL | Moadata vs. Automobile Pc | Moadata vs. Dongil Metal Co |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |