Correlation Between Kakaopay Corp and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Kakaopay Corp 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 Kakaopay Corp and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between kakaopay Corp and Hanjin Transportation Co, you can compare the effects of market volatilities on Kakaopay Corp 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 Kakaopay Corp with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakaopay Corp and Hanjin Transportation.
Diversification Opportunities for Kakaopay Corp and Hanjin Transportation
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kakaopay and Hanjin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding kakaopay 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 Kakaopay Corp 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 kakaopay 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 Kakaopay Corp i.e., Kakaopay Corp and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Kakaopay Corp and Hanjin Transportation
Assuming the 90 days trading horizon kakaopay Corp is expected to under-perform the Hanjin Transportation. In addition to that, Kakaopay Corp is 1.79 times more volatile than Hanjin Transportation Co. It trades about -0.02 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.0 per unit of volatility. If you would invest 1,999,376 in Hanjin Transportation Co on September 13, 2024 and sell it today you would lose (116,376) from holding Hanjin Transportation Co or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
kakaopay Corp vs. Hanjin Transportation Co
Performance |
| Timeline |
| kakaopay Corp |
| Hanjin Transportation |
Kakaopay Corp and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakaopay Corp and Hanjin Transportation
The main advantage of trading using opposite Kakaopay Corp and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakaopay Corp 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.| Kakaopay Corp vs. CJ Seafood Corp | Kakaopay Corp vs. Seoul Food Industrial | Kakaopay Corp vs. Cots Technology Co | Kakaopay Corp vs. CU Tech Corp |
| Hanjin Transportation vs. Samsung Electronics Co | Hanjin Transportation vs. Samsung Electronics Co | Hanjin Transportation vs. SK Hynix | Hanjin Transportation vs. POSCO Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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