Correlation Between HANA Micron and Humax

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

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

Diversification Opportunities for HANA Micron and Humax

-0.26

Correlation Coefficient

HANA Micron  Humax

Very good diversification

The 3 months correlation between HANA and Humax is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding HANA Micron and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax and HANA Micron 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 HANA Micron are associated (or correlated) with Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of HANA Micron i.e., HANA Micron and Humax go up and down completely randomly.

Pair Corralation between HANA Micron and Humax

Assuming the 90 days trading horizon HANA Micron is expected to generate 2.23 times more return on investment than Humax. However, HANA Micron is 2.23 times more volatile than Humax Co. It trades about 0.13 of its potential returns per unit of risk. Humax Co is currently generating about -0.15 per unit of risk. If you would invest  924,000  in HANA Micron on December 30, 2024 and sell it today you would earn a total of  308,000  from holding HANA Micron or generate 33.33% return on investment over 90 days.

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

HANA Micron  vs.  Humax Co

HANA Micron

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HANA Micron are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HANA Micron sustained solid returns over the last few months and may actually be approaching a breakup point.

Humax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with HANA Micron and Humax

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

The idea behind HANA Micron and Humax 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.