Correlation Between Hankook Furniture and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Guyoung Technology 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 Hankook Furniture and Guyoung Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankook Furniture Co and Guyoung Technology Co, you can compare the effects of market volatilities on Hankook Furniture and Guyoung Technology 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 Hankook Furniture with a short position of Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Guyoung Technology.
Diversification Opportunities for Hankook Furniture and Guyoung Technology
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hankook and Guyoung is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology and Hankook Furniture 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 Hankook Furniture Co are associated (or correlated) with Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Guyoung Technology go up and down completely randomly.
Pair Corralation between Hankook Furniture and Guyoung Technology
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.66 times more return on investment than Guyoung Technology. However, Hankook Furniture Co is 1.52 times less risky than Guyoung Technology. It trades about -0.01 of its potential returns per unit of risk. Guyoung Technology Co is currently generating about -0.05 per unit of risk. If you would invest 407,500 in Hankook Furniture Co on September 26, 2024 and sell it today you would lose (2,500) from holding Hankook Furniture Co or give up 0.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hankook Furniture Co vs. Guyoung Technology Co
Performance |
Timeline |
Hankook Furniture |
Guyoung Technology |
Hankook Furniture and Guyoung Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hankook Furniture and Guyoung Technology
The main advantage of trading using opposite Hankook Furniture and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.Hankook Furniture vs. Woori Technology Investment | Hankook Furniture vs. Samsung Card Co | Hankook Furniture vs. Korea Real Estate | Hankook Furniture vs. CHOROKBAEM PANY Co |
Guyoung Technology vs. Woori Technology Investment | Guyoung Technology vs. Samsung Card Co | Guyoung Technology vs. Korea Real Estate | Guyoung Technology vs. CHOROKBAEM PANY 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |