Correlation Between Hanjin Transportation and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Golden Bridge 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 Hanjin Transportation and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Golden Bridge Investment, you can compare the effects of market volatilities on Hanjin Transportation and Golden Bridge 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 Hanjin Transportation with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Golden Bridge.
Diversification Opportunities for Hanjin Transportation and Golden Bridge
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanjin and Golden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Golden Bridge go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Golden Bridge
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.94 times more return on investment than Golden Bridge. However, Hanjin Transportation Co is 1.06 times less risky than Golden Bridge. It trades about 0.05 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.12 per unit of risk. If you would invest 1,840,398 in Hanjin Transportation Co on October 6, 2024 and sell it today you would earn a total of 74,602 from holding Hanjin Transportation Co or generate 4.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hanjin Transportation Co vs. Golden Bridge Investment
Performance |
Timeline |
Hanjin Transportation |
Golden Bridge Investment |
Hanjin Transportation and Golden Bridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanjin Transportation and Golden Bridge
The main advantage of trading using opposite Hanjin Transportation and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.Hanjin Transportation vs. Cuckoo Electronics Co | Hanjin Transportation vs. Daewoo Electronic Components | Hanjin Transportation vs. Daeduck Electronics Co | Hanjin Transportation vs. Vissem Electronics Co |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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