Correlation Between Hana Microelectronics and G J
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and G J 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 G J 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 G J Steel, you can compare the effects of market volatilities on Hana Microelectronics and G J 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 G J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and G J.
Diversification Opportunities for Hana Microelectronics and G J
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hana and GJS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and G J Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G J Steel 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 G J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G J Steel has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and G J go up and down completely randomly.
Pair Corralation between Hana Microelectronics and G J
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the G J. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 1.51 times less risky than G J. The stock trades about -0.28 of its potential returns per unit of risk. The G J Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in G J Steel on September 24, 2024 and sell it today you would earn a total of 0.00 from holding G J Steel or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hana Microelectronics Public vs. G J Steel
Performance |
Timeline |
Hana Microelectronics |
G J Steel |
Hana Microelectronics and G J Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hana Microelectronics and G J
The main advantage of trading using opposite Hana Microelectronics and G J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, G J 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 G J will offset losses from the drop in G J's long position.Hana Microelectronics vs. Jay Mart Public | Hana Microelectronics vs. Interlink Telecom Public | Hana Microelectronics vs. Forth Public |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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