Correlation Between Hurum and HANA Micron
Can any of the company-specific risk be diversified away by investing in both Hurum and HANA Micron 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 Hurum and HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and HANA Micron, you can compare the effects of market volatilities on Hurum and HANA Micron 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 Hurum with a short position of HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and HANA Micron.
Diversification Opportunities for Hurum and HANA Micron
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hurum and HANA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron and Hurum 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 Hurum Co are associated (or correlated) with HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of Hurum i.e., Hurum and HANA Micron go up and down completely randomly.
Pair Corralation between Hurum and HANA Micron
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.79 times more return on investment than HANA Micron. However, Hurum Co is 1.26 times less risky than HANA Micron. It trades about -0.1 of its potential returns per unit of risk. HANA Micron is currently generating about -0.13 per unit of risk. If you would invest 102,200 in Hurum Co on September 3, 2024 and sell it today you would lose (31,700) from holding Hurum Co or give up 31.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. HANA Micron
Performance |
| Timeline |
| Hurum |
| HANA Micron |
Hurum and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and HANA Micron
The main advantage of trading using opposite Hurum and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron's long position.| Hurum vs. Samhwa Paint Industrial | Hurum vs. EV Advanced Material | Hurum vs. Haesung Industrial Co | Hurum vs. Hyundai Industrial Co |
| HANA Micron vs. Haitai Confectionery Foods | HANA Micron vs. CJ Seafood Corp | HANA Micron vs. Samlip General Foods | HANA Micron vs. Foodnamoo |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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