Correlation Between Hwasung Industrial and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Hwasung Industrial and Duksan Hi 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 Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on Hwasung Industrial and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwasung Industrial and Duksan Hi.
Diversification Opportunities for Hwasung Industrial and Duksan Hi
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hwasung and Duksan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hwasung Industrial Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Hwasung Industrial i.e., Hwasung Industrial and Duksan Hi go up and down completely randomly.
Pair Corralation between Hwasung Industrial and Duksan Hi
Assuming the 90 days trading horizon Hwasung Industrial Co is expected to generate 0.66 times more return on investment than Duksan Hi. However, Hwasung Industrial Co is 1.53 times less risky than Duksan Hi. It trades about 0.15 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about 0.08 per unit of risk. If you would invest 870,246 in Hwasung Industrial Co on October 30, 2024 and sell it today you would earn a total of 90,754 from holding Hwasung Industrial Co or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwasung Industrial Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Hwasung Industrial |
| Duksan Hi Metal |
Hwasung Industrial and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwasung Industrial and Duksan Hi
The main advantage of trading using opposite Hwasung Industrial and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwasung Industrial position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Hwasung Industrial vs. ABOV Semiconductor Co | Hwasung Industrial vs. GS Retail Co | Hwasung Industrial vs. ITM Semiconductor Co | Hwasung Industrial vs. Seoul Semiconductor Co |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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