Correlation Between Handok Clean and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Kumho Petro 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 Handok Clean and Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Kumho Petro Chemical, you can compare the effects of market volatilities on Handok Clean and Kumho Petro 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 Handok Clean with a short position of Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Kumho Petro.
Diversification Opportunities for Handok Clean and Kumho Petro
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Handok and Kumho is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical and Handok Clean 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 Handok Clean Tech are associated (or correlated) with Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Handok Clean i.e., Handok Clean and Kumho Petro go up and down completely randomly.
Pair Corralation between Handok Clean and Kumho Petro
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 0.8 times more return on investment than Kumho Petro. However, Handok Clean Tech is 1.25 times less risky than Kumho Petro. It trades about 0.14 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about 0.04 per unit of risk. If you would invest 604,000 in Handok Clean Tech on October 26, 2024 and sell it today you would earn a total of 30,000 from holding Handok Clean Tech or generate 4.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Handok Clean Tech vs. Kumho Petro Chemical
Performance |
Timeline |
Handok Clean Tech |
Kumho Petro Chemical |
Handok Clean and Kumho Petro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Handok Clean and Kumho Petro
The main advantage of trading using opposite Handok Clean and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.Handok Clean vs. CKH Food Health | Handok Clean vs. Woorim Machinery Co | Handok Clean vs. Kyeryong Construction Industrial | Handok Clean vs. FOODWELL Co |
Kumho Petro vs. Clean Science co | Kumho Petro vs. Duksan Hi Metal | Kumho Petro vs. Formetal Co | Kumho Petro vs. Polaris Office Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |