Correlation Between Hanmi Semiconductor and People Technology

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

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

Diversification Opportunities for Hanmi Semiconductor and People Technology

-0.11

Correlation Coefficient

Hanmi Semiconductor  People Technology

Good diversification

The 3 months correlation between Hanmi and People is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology and Hanmi Semiconductor 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 Hanmi Semiconductor Co are associated (or correlated) with People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and People Technology go up and down completely randomly.

Pair Corralation between Hanmi Semiconductor and People Technology

Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to under-perform the People Technology. In addition to that, Hanmi Semiconductor is 1.3 times more volatile than People Technology. It trades about -0.01 of its total potential returns per unit of risk. People Technology is currently generating about 0.06 per unit of volatility. If you would invest  3,785,000  in People Technology on December 29, 2024 and sell it today you would earn a total of  325,000  from holding People Technology or generate 8.59% return on investment over 90 days.

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

Hanmi Semiconductor Co  vs.  People Technology

Hanmi Semiconductor

Risk-Adjusted Performance

Very Weak

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

People Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in People Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, People Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hanmi Semiconductor and People Technology

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

The idea behind Hanmi Semiconductor Co and People Technology 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.