Correlation Between Hyundai Steel and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Hyundai Steel and Hanil Iron 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 Hyundai Steel and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Steel and Hanil Iron Steel, you can compare the effects of market volatilities on Hyundai Steel and Hanil Iron 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 Hyundai Steel with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Steel and Hanil Iron.
Diversification Opportunities for Hyundai Steel and Hanil Iron
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Hanil is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Steel and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Hyundai Steel 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 Hyundai Steel are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Hyundai Steel i.e., Hyundai Steel and Hanil Iron go up and down completely randomly.
Pair Corralation between Hyundai Steel and Hanil Iron
Assuming the 90 days trading horizon Hyundai Steel is expected to under-perform the Hanil Iron. In addition to that, Hyundai Steel is 1.19 times more volatile than Hanil Iron Steel. It trades about -0.36 of its total potential returns per unit of risk. Hanil Iron Steel is currently generating about 0.11 per unit of volatility. 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Steel vs. Hanil Iron Steel
Performance |
| Timeline |
| Hyundai Steel |
| Hanil Iron Steel |
Hyundai Steel and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Steel and Hanil Iron
The main advantage of trading using opposite Hyundai Steel and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Steel position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Hyundai Steel vs. Korea Investment Holdings | Hyundai Steel vs. Gyeongnam Steel Co | Hyundai Steel vs. EBEST Investment Securities | Hyundai Steel vs. Jeil Steel Mfg |
| Hanil Iron vs. Nh Investment And | Hanil Iron vs. Korea Investment Holdings | Hanil Iron vs. DB Financial Investment | Hanil Iron vs. Woori Technology Investment |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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