Correlation Between Hanmi Semiconductor and Heungkuk Metaltech

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

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

Diversification Opportunities for Hanmi Semiconductor and Heungkuk Metaltech

-0.15

Correlation Coefficient

Hanmi Semiconductor  Heungkuk Metaltech

Good diversification

The 3 months correlation between Hanmi and Heungkuk is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hanmi Semiconductor Co and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Hanmi Semiconductor 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 Hanmi Semiconductor Co are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Hanmi Semiconductor i.e., Hanmi Semiconductor and Heungkuk Metaltech go up and down completely randomly.

Pair Corralation between Hanmi Semiconductor and Heungkuk Metaltech

Assuming the 90 days trading horizon Hanmi Semiconductor is expected to generate 1.39 times less return on investment than Heungkuk Metaltech. In addition to that, Hanmi Semiconductor is 1.24 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.1 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.18 per unit of volatility. If you would invest  469,000  in Heungkuk Metaltech CoLtd on September 20, 2024 and sell it today you would earn a total of  56,000  from holding Heungkuk Metaltech CoLtd or generate 11.94% return on investment over 90 days.

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

Hanmi Semiconductor Co  vs.  Heungkuk Metaltech CoLtd

Hanmi Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanmi Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Heungkuk Metaltech CoLtd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heungkuk Metaltech CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heungkuk Metaltech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hanmi Semiconductor and Heungkuk Metaltech

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

The idea behind Hanmi Semiconductor Co and Heungkuk Metaltech CoLtd 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.