Correlation Between Hanmi Semiconductor and DataSolution

Can any of the company-specific risk be diversified away by investing in both Hanmi Semiconductor and DataSolution 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 DataSolution 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 DataSolution, you can compare the effects of market volatilities on Hanmi Semiconductor and DataSolution 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 DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanmi Semiconductor and DataSolution.

Diversification Opportunities for Hanmi Semiconductor and DataSolution

0.79

Correlation Coefficient

Hanmi Semiconductor  DataSolution

Poor diversification

The 3 months correlation between Hanmi and DataSolution is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution 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 DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and DataSolution go up and down completely randomly.

Pair Corralation between Hanmi Semiconductor and DataSolution

Assuming the 90 days trading horizon Hanmi Semiconductor Co is expected to generate 1.54 times more return on investment than DataSolution. However, Hanmi Semiconductor is 1.54 times more volatile than DataSolution. It trades about 0.04 of its potential returns per unit of risk. DataSolution is currently generating about 0.02 per unit of risk. If you would invest  8,184,725  in Hanmi Semiconductor Co on December 26, 2024 and sell it today you would earn a total of  335,275  from holding Hanmi Semiconductor Co or generate 4.1% return on investment over 90 days.

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

Hanmi Semiconductor Co  vs.  DataSolution

Hanmi Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanmi Semiconductor Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hanmi Semiconductor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DataSolution

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DataSolution are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, DataSolution is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hanmi Semiconductor and DataSolution

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

The idea behind Hanmi Semiconductor Co and DataSolution 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.