Correlation Between Hanil Iron and Dongbu Insurance
Can any of the company-specific risk be diversified away by investing in both Hanil Iron and Dongbu Insurance 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 Hanil Iron and Dongbu Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Iron Steel and Dongbu Insurance Co, you can compare the effects of market volatilities on Hanil Iron and Dongbu Insurance 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 Hanil Iron with a short position of Dongbu Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Dongbu Insurance.
Diversification Opportunities for Hanil Iron and Dongbu Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanil and Dongbu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Dongbu Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Insurance and Hanil Iron 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 Hanil Iron Steel are associated (or correlated) with Dongbu Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbu Insurance has no effect on the direction of Hanil Iron i.e., Hanil Iron and Dongbu Insurance go up and down completely randomly.
Pair Corralation between Hanil Iron and Dongbu Insurance
Assuming the 90 days trading horizon Hanil Iron Steel is expected to under-perform the Dongbu Insurance. In addition to that, Hanil Iron is 1.01 times more volatile than Dongbu Insurance Co. It trades about -0.08 of its total potential returns per unit of risk. Dongbu Insurance Co is currently generating about -0.06 per unit of volatility. If you would invest 10,370,000 in Dongbu Insurance Co on November 7, 2024 and sell it today you would lose (370,000) from holding Dongbu Insurance Co or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Iron Steel vs. Dongbu Insurance Co
Performance |
| Timeline |
| Hanil Iron Steel |
| Dongbu Insurance |
Hanil Iron and Dongbu Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and Dongbu Insurance
The main advantage of trading using opposite Hanil Iron and Dongbu Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, Dongbu Insurance 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 Dongbu Insurance will offset losses from the drop in Dongbu Insurance's long position.| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
| Dongbu Insurance vs. Korea Air Svc | Dongbu Insurance vs. T3 Entertainment Co | Dongbu Insurance vs. Cloud Air CoLtd | Dongbu Insurance vs. Tamul Multimedia Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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