Correlation Between Hanyang ENG and SHINWON STRUCTION

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

By analyzing existing cross correlation between Hanyang ENG Co and SHINWON STRUCTION COMPANY, you can compare the effects of market volatilities on Hanyang ENG and SHINWON STRUCTION 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 Hanyang ENG with a short position of SHINWON STRUCTION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanyang ENG and SHINWON STRUCTION.

Diversification Opportunities for Hanyang ENG and SHINWON STRUCTION

0.77

Correlation Coefficient

Hanyang ENG  SHINWON STRUCTION

Poor diversification

The 3 months correlation between Hanyang and SHINWON is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hanyang ENG Co and SHINWON STRUCTION COMPANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINWON STRUCTION PANY and Hanyang ENG 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 Hanyang ENG Co are associated (or correlated) with SHINWON STRUCTION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINWON STRUCTION PANY has no effect on the direction of Hanyang ENG i.e., Hanyang ENG and SHINWON STRUCTION go up and down completely randomly.

Pair Corralation between Hanyang ENG and SHINWON STRUCTION

Assuming the 90 days trading horizon Hanyang ENG Co is expected to generate 0.32 times more return on investment than SHINWON STRUCTION. However, Hanyang ENG Co is 3.17 times less risky than SHINWON STRUCTION. It trades about -0.08 of its potential returns per unit of risk. SHINWON STRUCTION COMPANY is currently generating about -0.06 per unit of risk. If you would invest  1,786,000  in Hanyang ENG Co on September 13, 2024 and sell it today you would lose (147,000) from holding Hanyang ENG Co or give up 8.23% of portfolio value over 90 days.

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

Hanyang ENG Co  vs.  SHINWON STRUCTION COMPANY

Hanyang ENG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanyang ENG 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.

SHINWON STRUCTION PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHINWON STRUCTION COMPANY 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.

Pair Trading with Hanyang ENG and SHINWON STRUCTION

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

The idea behind Hanyang ENG Co and SHINWON STRUCTION COMPANY 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..