Correlation Between Hana Technology and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hana Technology and ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor Co, you can compare the effects of market volatilities on Hana Technology and ABOV Semiconductor 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 ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Technology and ABOV Semiconductor.
Diversification Opportunities for Hana Technology and ABOV Semiconductor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and ABOV is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hana Technology Co and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor 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 ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of Hana Technology i.e., Hana Technology and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between Hana Technology and ABOV Semiconductor
Assuming the 90 days trading horizon Hana Technology Co is expected to under-perform the ABOV Semiconductor. In addition to that, Hana Technology is 1.49 times more volatile than ABOV Semiconductor Co. It trades about -0.25 of its total potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.3 per unit of volatility. If you would invest 986,000 in ABOV Semiconductor Co on August 30, 2024 and sell it today you would lose (169,000) from holding ABOV Semiconductor Co or give up 17.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hana Technology Co vs. ABOV Semiconductor Co
Performance |
| Timeline |
| Hana Technology |
| ABOV Semiconductor |
Hana Technology and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Technology and ABOV Semiconductor
The main advantage of trading using opposite Hana Technology and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Technology position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| Hana Technology vs. CS BEARING CoLtd | Hana Technology vs. DAEMO Engineering Co | Hana Technology vs. Booster Co |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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