Correlation Between Ford and Hancom
Can any of the company-specific risk be diversified away by investing in both Ford and Hancom 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 Ford and Hancom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hancom Inc, you can compare the effects of market volatilities on Ford and Hancom 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 Ford with a short position of Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hancom.
Diversification Opportunities for Ford and Hancom
Very weak diversification
The 3 months correlation between Ford and Hancom is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc and Ford 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 Ford Motor are associated (or correlated) with Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Ford i.e., Ford and Hancom go up and down completely randomly.
Pair Corralation between Ford and Hancom
Taking into account the 90-day investment horizon Ford is expected to generate 5.51 times less return on investment than Hancom. But when comparing it to its historical volatility, Ford Motor is 2.15 times less risky than Hancom. It trades about 0.03 of its potential returns per unit of risk. Hancom Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,397,000 in Hancom Inc on September 2, 2024 and sell it today you would earn a total of 1,133,000 from holding Hancom Inc or generate 81.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Ford Motor vs. Hancom Inc
Performance |
| Timeline |
| Ford Motor |
| Hancom Inc |
Ford and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hancom
The main advantage of trading using opposite Ford and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.The idea behind Ford Motor and Hancom Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hancom vs. Dongsin Engineering Construction | Hancom vs. Doosan Fuel Cell | Hancom vs. Daishin Balance 1 | Hancom vs. Total Soft Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |