Correlation Between Seah Steel and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Seah Steel 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 Seah Steel and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Hanjin Transportation Co, you can compare the effects of market volatilities on Seah Steel 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 Seah Steel with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Hanjin Transportation.
Diversification Opportunities for Seah Steel and Hanjin Transportation
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seah and Hanjin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Seah Steel 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 Seah Steel Corp 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 Seah Steel i.e., Seah Steel and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Seah Steel and Hanjin Transportation
Assuming the 90 days trading horizon Seah Steel Corp is expected to under-perform the Hanjin Transportation. But the stock apears to be less risky and, when comparing its historical volatility, Seah Steel Corp is 1.15 times less risky than Hanjin Transportation. The stock trades about -0.03 of its potential returns per unit of risk. The Hanjin Transportation Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,950,207 in Hanjin Transportation Co on August 29, 2024 and sell it today you would lose (52,207) from holding Hanjin Transportation Co or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Hanjin Transportation Co
Performance |
| Timeline |
| Seah Steel Corp |
| Hanjin Transportation |
Seah Steel and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Hanjin Transportation
The main advantage of trading using opposite Seah Steel and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel 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.| Seah Steel vs. Cuckoo Electronics Co | Seah Steel vs. KyungIn Electronics Co | Seah Steel vs. Genie Music | Seah Steel vs. Duksan Hi Metal |
| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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