Correlation Between Hanil Iron and STI
Can any of the company-specific risk be diversified away by investing in both Hanil Iron and STI 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 STI 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 STI Co, you can compare the effects of market volatilities on Hanil Iron and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and STI.
Diversification Opportunities for Hanil Iron and STI
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanil and STI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Hanil Iron i.e., Hanil Iron and STI go up and down completely randomly.
Pair Corralation between Hanil Iron and STI
Assuming the 90 days trading horizon Hanil Iron Steel is expected to generate 0.64 times more return on investment than STI. However, Hanil Iron Steel is 1.56 times less risky than STI. It trades about 0.01 of its potential returns per unit of risk. STI Co is currently generating about -0.13 per unit of risk. If you would invest 203,000 in Hanil Iron Steel on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Hanil Iron Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanil Iron Steel vs. STI Co
Performance |
| Timeline |
| Hanil Iron Steel |
| STI Co |
Hanil Iron and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and STI
The main advantage of trading using opposite Hanil Iron and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, STI 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 STI will offset losses from the drop in STI's long position.| Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. SK Hynix | Hanil Iron vs. POSCO Holdings |
| STI vs. Automobile Pc | STI vs. Puloon Technology | STI vs. Ssangyong Information Communication | STI vs. Solution Advanced Technology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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