Correlation Between Hwasung Industrial and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Hwasung Industrial and Kbi Metal 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 Hwasung Industrial and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwasung Industrial Co and Kbi Metal Co, you can compare the effects of market volatilities on Hwasung Industrial and Kbi Metal 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 Hwasung Industrial with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwasung Industrial and Kbi Metal.
Diversification Opportunities for Hwasung Industrial and Kbi Metal
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hwasung and Kbi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hwasung Industrial Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Hwasung Industrial 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 Hwasung Industrial Co are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Hwasung Industrial i.e., Hwasung Industrial and Kbi Metal go up and down completely randomly.
Pair Corralation between Hwasung Industrial and Kbi Metal
Assuming the 90 days trading horizon Hwasung Industrial Co is expected to generate 0.5 times more return on investment than Kbi Metal. However, Hwasung Industrial Co is 1.99 times less risky than Kbi Metal. It trades about 0.1 of its potential returns per unit of risk. Kbi Metal Co is currently generating about -0.12 per unit of risk. If you would invest 848,395 in Hwasung Industrial Co on October 14, 2024 and sell it today you would earn a total of 103,605 from holding Hwasung Industrial Co or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwasung Industrial Co vs. Kbi Metal Co
Performance |
| Timeline |
| Hwasung Industrial |
| Kbi Metal |
Hwasung Industrial and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwasung Industrial and Kbi Metal
The main advantage of trading using opposite Hwasung Industrial and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwasung Industrial position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Hwasung Industrial vs. Songwon Industrial Co | Hwasung Industrial vs. ABOV Semiconductor Co | Hwasung Industrial vs. Handok Clean Tech | Hwasung Industrial vs. Cheryong Industrial CoLtd |
| Kbi Metal vs. Hwasung Industrial Co | Kbi Metal vs. Eagon Industrial Co | Kbi Metal vs. Pyung Hwa Industrial | Kbi Metal vs. Hyundai Industrial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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