Correlation Between Hanil Iron and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both Hanil Iron and Moonbae Steel 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 Moonbae Steel 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 Moonbae Steel, you can compare the effects of market volatilities on Hanil Iron and Moonbae Steel 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 Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Moonbae Steel.
Diversification Opportunities for Hanil Iron and Moonbae Steel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanil and Moonbae is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel 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 Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of Hanil Iron i.e., Hanil Iron and Moonbae Steel go up and down completely randomly.
Pair Corralation between Hanil Iron and Moonbae Steel
Assuming the 90 days trading horizon Hanil Iron Steel is expected to under-perform the Moonbae Steel. But the stock apears to be less risky and, when comparing its historical volatility, Hanil Iron Steel is 1.21 times less risky than Moonbae Steel. The stock trades about -0.07 of its potential returns per unit of risk. The Moonbae Steel is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 288,000 in Moonbae Steel on August 25, 2024 and sell it today you would lose (33,000) from holding Moonbae Steel or give up 11.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Iron Steel vs. Moonbae Steel
Performance |
| Timeline |
| Hanil Iron Steel |
| Moonbae Steel |
Hanil Iron and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and Moonbae Steel
The main advantage of trading using opposite Hanil Iron and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, Moonbae Steel 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
| Moonbae Steel vs. LG Chemicals | Moonbae Steel vs. POSCO Holdings | Moonbae Steel vs. Lotte Chemical Corp | Moonbae Steel vs. Hyundai Steel |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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