Correlation Between Hankukpackage and Sewoon Medical

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

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

Diversification Opportunities for Hankukpackage and Sewoon Medical

0.81

Correlation Coefficient

Hankukpackage  Sewoon Medical

Very poor diversification

The 3 months correlation between Hankukpackage and Sewoon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hankukpackage Co and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and Hankukpackage 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 Hankukpackage Co are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Hankukpackage i.e., Hankukpackage and Sewoon Medical go up and down completely randomly.

Pair Corralation between Hankukpackage and Sewoon Medical

Assuming the 90 days trading horizon Hankukpackage Co is expected to generate 1.44 times more return on investment than Sewoon Medical. However, Hankukpackage is 1.44 times more volatile than Sewoon Medical Co. It trades about 0.11 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about 0.1 per unit of risk. If you would invest  168,453  in Hankukpackage Co on October 6, 2024 and sell it today you would earn a total of  10,347  from holding Hankukpackage Co or generate 6.14% return on investment over 90 days.

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

Hankukpackage Co  vs.  Sewoon Medical Co

Hankukpackage

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sewoon Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sewoon Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hankukpackage and Sewoon Medical

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

The idea behind Hankukpackage Co and Sewoon Medical 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.