Correlation Between Hana Microelectronics and ICC International

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

By analyzing existing cross correlation between Hana Microelectronics Public and ICC International Public, you can compare the effects of market volatilities on Hana Microelectronics and ICC International 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 Microelectronics with a short position of ICC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and ICC International.

Diversification Opportunities for Hana Microelectronics and ICC International

0.42

Correlation Coefficient

Hana Microelectronics  ICC International

Very weak diversification

The 3 months correlation between Hana and ICC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and ICC International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC International Public and Hana Microelectronics 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 Microelectronics Public are associated (or correlated) with ICC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC International Public has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and ICC International go up and down completely randomly.

Pair Corralation between Hana Microelectronics and ICC International

Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the ICC International. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 29.02 times less risky than ICC International. The stock trades about -0.07 of its potential returns per unit of risk. The ICC International Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,104  in ICC International Public on October 9, 2024 and sell it today you would lose (929.00) from holding ICC International Public or give up 22.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.44%
Values	Daily Returns

Hana Microelectronics Public  vs.  ICC International Public

Hana Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hana Microelectronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ICC International Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICC International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, ICC International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hana Microelectronics and ICC International

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

The idea behind Hana Microelectronics Public and ICC International Public 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.