Correlation Between Hanil Iron and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Hanil Iron and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Hanil Iron and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Dongwoo Farm.
Diversification Opportunities for Hanil Iron and Dongwoo Farm
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanil and Dongwoo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Hanil Iron i.e., Hanil Iron and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Hanil Iron and Dongwoo Farm
Assuming the 90 days trading horizon Hanil Iron Steel is expected to generate 1.45 times more return on investment than Dongwoo Farm. However, Hanil Iron is 1.45 times more volatile than Dongwoo Farm To. It trades about 0.11 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.17 per unit of risk. If you would invest 201,500 in Hanil Iron Steel on September 1, 2024 and sell it today you would earn a total of 9,000 from holding Hanil Iron Steel or generate 4.47% 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. Dongwoo Farm To
Performance |
| Timeline |
| Hanil Iron Steel |
| Dongwoo Farm To |
Hanil Iron and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and Dongwoo Farm
The main advantage of trading using opposite Hanil Iron and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Hanil Iron vs. Nh Investment And | Hanil Iron vs. Korea Investment Holdings | Hanil Iron vs. DB Financial Investment | Hanil Iron vs. Woori Technology Investment |
| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Busan Industrial Co | Dongwoo Farm vs. Busan Ind | Dongwoo Farm vs. Mirae Asset Daewoo |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |