Correlation Between Hansol Homedeco and JETEMA

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

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

Diversification Opportunities for Hansol Homedeco and JETEMA

-0.45

Correlation Coefficient

Hansol Homedeco  JETEMA

Very good diversification

The 3 months correlation between Hansol and JETEMA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Homedeco Co and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA and Hansol Homedeco 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 Homedeco Co are associated (or correlated) with JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of Hansol Homedeco i.e., Hansol Homedeco and JETEMA go up and down completely randomly.

Pair Corralation between Hansol Homedeco and JETEMA

Assuming the 90 days trading horizon Hansol Homedeco Co is expected to generate 1.42 times more return on investment than JETEMA. However, Hansol Homedeco is 1.42 times more volatile than JETEMA Co. It trades about 0.2 of its potential returns per unit of risk. JETEMA Co is currently generating about -0.14 per unit of risk. If you would invest  69,700  in Hansol Homedeco Co on October 26, 2024 and sell it today you would earn a total of  48,300  from holding Hansol Homedeco Co or generate 69.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hansol Homedeco Co  vs.  JETEMA Co

Hansol Homedeco

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hansol Homedeco Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hansol Homedeco sustained solid returns over the last few months and may actually be approaching a breakup point.

JETEMA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JETEMA Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hansol Homedeco and JETEMA

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

The idea behind Hansol Homedeco Co and JETEMA Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.