Correlation Between Hana Materials and TJ Media

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

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

Diversification Opportunities for Hana Materials and TJ Media

0.79

Correlation Coefficient

Hana Materials  TJ Media

Poor diversification

The 3 months correlation between Hana and 032540 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Hana Materials 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 Materials are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Hana Materials i.e., Hana Materials and TJ Media go up and down completely randomly.

Pair Corralation between Hana Materials and TJ Media

Assuming the 90 days trading horizon Hana Materials is expected to under-perform the TJ Media. In addition to that, Hana Materials is 2.23 times more volatile than TJ media Co. It trades about -0.03 of its total potential returns per unit of risk. TJ media Co is currently generating about -0.01 per unit of volatility. If you would invest  490,397  in TJ media Co on October 24, 2024 and sell it today you would lose (7,397) from holding TJ media Co or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Hana Materials  vs.  TJ media Co

Hana Materials

Risk-Adjusted Performance

0 of 100

Very Weak

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

TJ media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hana Materials and TJ Media

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

The idea behind Hana Materials and TJ media 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.