Correlation Between Hankukpackage and Pum Tech

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

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

Diversification Opportunities for Hankukpackage and Pum Tech

-0.1

Correlation Coefficient

Hankukpackage  Pum Tech

Good diversification

The 3 months correlation between Hankukpackage and Pum is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hankukpackage Co and Pum Tech Korea Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pum Tech Korea and Hankukpackage 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 Hankukpackage Co are associated (or correlated) with Pum Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pum Tech Korea has no effect on the direction of Hankukpackage i.e., Hankukpackage and Pum Tech go up and down completely randomly.

Pair Corralation between Hankukpackage and Pum Tech

Assuming the 90 days trading horizon Hankukpackage Co is expected to under-perform the Pum Tech. In addition to that, Hankukpackage is 1.04 times more volatile than Pum Tech Korea Co. It trades about -0.04 of its total potential returns per unit of risk. Pum Tech Korea Co is currently generating about 0.37 per unit of volatility. If you would invest  3,345,000  in Pum Tech Korea Co on September 25, 2024 and sell it today you would earn a total of  860,000  from holding Pum Tech Korea Co or generate 25.71% return on investment over 90 days.

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

Hankukpackage Co  vs.  Pum Tech Korea Co

Hankukpackage

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pum Tech Korea

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pum Tech Korea Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Pum Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hankukpackage and Pum Tech

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

The idea behind Hankukpackage Co and Pum Tech Korea 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.