Correlation Between Hurum and Hansol Inticube
Can any of the company-specific risk be diversified away by investing in both Hurum and Hansol Inticube 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 Hansol Inticube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Hansol Inticube Co, you can compare the effects of market volatilities on Hurum and Hansol Inticube 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 Hansol Inticube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Hansol Inticube.
Diversification Opportunities for Hurum and Hansol Inticube
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurum and Hansol is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Hansol Inticube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Inticube 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 Hansol Inticube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Inticube has no effect on the direction of Hurum i.e., Hurum and Hansol Inticube go up and down completely randomly.
Pair Corralation between Hurum and Hansol Inticube
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Hansol Inticube. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.25 times less risky than Hansol Inticube. The stock trades about -0.03 of its potential returns per unit of risk. The Hansol Inticube Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 168,000 in Hansol Inticube Co on August 31, 2024 and sell it today you would lose (67,300) from holding Hansol Inticube Co or give up 40.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hurum Co vs. Hansol Inticube Co
Performance |
| Timeline |
| Hurum |
| Hansol Inticube |
Hurum and Hansol Inticube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Hansol Inticube
The main advantage of trading using opposite Hurum and Hansol Inticube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Hansol Inticube 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 Hansol Inticube will offset losses from the drop in Hansol Inticube's long position.| Hurum vs. Shinsegae Information Communication | Hurum vs. Korea Computer | Hurum vs. LG Display Co | Hurum vs. Sangsangin Investment Securities |
| Hansol Inticube vs. Myoung Shin Industrial | Hansol Inticube vs. Namhwa Industrial Co | Hansol Inticube vs. Daiyang Metal Co | Hansol Inticube vs. PJ Metal Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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