Correlation Between HLB Power and AhnLab

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

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

Diversification Opportunities for HLB Power and AhnLab

-0.47

Correlation Coefficient

HLB Power  AhnLab

Very good diversification

The 3 months correlation between HLB and AhnLab is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HLB Power Co and AhnLab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AhnLab Inc and HLB Power 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 HLB Power Co are associated (or correlated) with AhnLab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AhnLab Inc has no effect on the direction of HLB Power i.e., HLB Power and AhnLab go up and down completely randomly.

Pair Corralation between HLB Power and AhnLab

Assuming the 90 days trading horizon HLB Power Co is expected to under-perform the AhnLab. In addition to that, HLB Power is 1.28 times more volatile than AhnLab Inc. It trades about -0.5 of its total potential returns per unit of risk. AhnLab Inc is currently generating about 0.01 per unit of volatility. If you would invest  6,120,000  in AhnLab Inc on September 4, 2024 and sell it today you would earn a total of  0.00  from holding AhnLab Inc or generate 0.0% return on investment over 90 days.

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

HLB Power Co  vs.  AhnLab Inc

HLB Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HLB Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AhnLab Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AhnLab Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AhnLab sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HLB Power and AhnLab

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

The idea behind HLB Power Co and AhnLab Inc 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.