Correlation Between Hanil Iron and Celltrion

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Can any of the company-specific risk be diversified away by investing in both Hanil Iron and Celltrion 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 Hanil Iron and Celltrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Iron Steel and Celltrion, you can compare the effects of market volatilities on Hanil Iron and Celltrion 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 Hanil Iron with a short position of Celltrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Celltrion.

Diversification Opportunities for Hanil Iron and Celltrion

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Hanil and Celltrion is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Celltrion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celltrion and Hanil Iron 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 Hanil Iron Steel are associated (or correlated) with Celltrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celltrion has no effect on the direction of Hanil Iron i.e., Hanil Iron and Celltrion go up and down completely randomly.

Pair Corralation between Hanil Iron and Celltrion

Assuming the 90 days trading horizon Hanil Iron is expected to generate 7.45 times less return on investment than Celltrion. But when comparing it to its historical volatility, Hanil Iron Steel is 1.51 times less risky than Celltrion. It trades about 0.04 of its potential returns per unit of risk. Celltrion is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  16,607,600  in Celltrion on October 8, 2024 and sell it today you would earn a total of  1,482,400  from holding Celltrion or generate 8.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hanil Iron Steel  vs.  Celltrion

 Performance 
       Timeline  
Hanil Iron Steel 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hanil Iron Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hanil Iron is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Celltrion 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Celltrion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Celltrion is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hanil Iron and Celltrion Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hanil Iron and Celltrion

The main advantage of trading using opposite Hanil Iron and Celltrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, Celltrion 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 Celltrion will offset losses from the drop in Celltrion's long position.
The idea behind Hanil Iron Steel and Celltrion 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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