Correlation Between Hansol Chemical and Cytogen

Can any of the company-specific risk be diversified away by investing in both Hansol Chemical and Cytogen 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 Hansol Chemical and Cytogen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hansol Chemical Co and Cytogen, you can compare the effects of market volatilities on Hansol Chemical and Cytogen 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 Hansol Chemical with a short position of Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemical and Cytogen.

Diversification Opportunities for Hansol Chemical and Cytogen

0.03

Correlation Coefficient

Hansol Chemical  Cytogen

Significant diversification

The 3 months correlation between Hansol and Cytogen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemical Co and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen and Hansol Chemical 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 Hansol Chemical Co are associated (or correlated) with Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Hansol Chemical i.e., Hansol Chemical and Cytogen go up and down completely randomly.

Pair Corralation between Hansol Chemical and Cytogen

Assuming the 90 days trading horizon Hansol Chemical Co is expected to generate 0.5 times more return on investment than Cytogen. However, Hansol Chemical Co is 1.98 times less risky than Cytogen. It trades about 0.08 of its potential returns per unit of risk. Cytogen is currently generating about -0.06 per unit of risk. If you would invest  9,740,000  in Hansol Chemical Co on December 2, 2024 and sell it today you would earn a total of  1,240,000  from holding Hansol Chemical Co or generate 12.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hansol Chemical Co  vs.  Cytogen

Hansol Chemical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hansol Chemical Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hansol Chemical sustained solid returns over the last few months and may actually be approaching a breakup point.

Cytogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cytogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hansol Chemical and Cytogen

The main advantage of trading using opposite Hansol Chemical and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemical position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.

The idea behind Hansol Chemical Co and Cytogen 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.