Correlation Between Hana Technology and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Hana Technology and Camus Engineering 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 Hana Technology and Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Technology Co and Camus Engineering Construction, you can compare the effects of market volatilities on Hana Technology and Camus Engineering 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 Hana Technology with a short position of Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Technology and Camus Engineering.
Diversification Opportunities for Hana Technology and Camus Engineering
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and Camus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hana Technology Co and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering and Hana Technology 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 Hana Technology Co are associated (or correlated) with Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Hana Technology i.e., Hana Technology and Camus Engineering go up and down completely randomly.
Pair Corralation between Hana Technology and Camus Engineering
Assuming the 90 days trading horizon Hana Technology Co is expected to under-perform the Camus Engineering. In addition to that, Hana Technology is 2.25 times more volatile than Camus Engineering Construction. It trades about -0.24 of its total potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.07 per unit of volatility. If you would invest 131,900 in Camus Engineering Construction on August 29, 2024 and sell it today you would lose (4,000) from holding Camus Engineering Construction or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Technology Co vs. Camus Engineering Construction
Performance |
| Timeline |
| Hana Technology |
| Camus Engineering |
Hana Technology and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Technology and Camus Engineering
The main advantage of trading using opposite Hana Technology and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Technology position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.The idea behind Hana Technology Co and Camus Engineering Construction 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.| Camus Engineering vs. Coloray International Investment | Camus Engineering vs. Orbitech Co | Camus Engineering vs. Sangsangin Investment Securities | Camus Engineering vs. E Investment Development |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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