Correlation Between Hankook Furniture and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Korea Refractories 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 Hankook Furniture and Korea Refractories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankook Furniture Co and Korea Refractories Co, you can compare the effects of market volatilities on Hankook Furniture and Korea Refractories 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 Hankook Furniture with a short position of Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Korea Refractories.
Diversification Opportunities for Hankook Furniture and Korea Refractories
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and Korea is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories and Hankook Furniture 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 Hankook Furniture Co are associated (or correlated) with Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Korea Refractories go up and down completely randomly.
Pair Corralation between Hankook Furniture and Korea Refractories
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.44 times more return on investment than Korea Refractories. However, Hankook Furniture Co is 2.27 times less risky than Korea Refractories. It trades about -0.01 of its potential returns per unit of risk. Korea Refractories Co is currently generating about -0.01 per unit of risk. If you would invest 433,604 in Hankook Furniture Co on September 1, 2024 and sell it today you would lose (28,104) from holding Hankook Furniture Co or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.77% |
| Values | Daily Returns |
Hankook Furniture Co vs. Korea Refractories Co
Performance |
| Timeline |
| Hankook Furniture |
| Korea Refractories |
Hankook Furniture and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Korea Refractories
The main advantage of trading using opposite Hankook Furniture and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' long position.| Hankook Furniture vs. LG Display | Hankook Furniture vs. Hyundai Motor | Hankook Furniture vs. Hyundai Motor Co | Hankook Furniture vs. Hyundai Motor Co |
| Korea Refractories vs. Wave Electronics Co | Korea Refractories vs. Insung Information Co | Korea Refractories vs. iNtRON Biotechnology | Korea Refractories vs. Sungwoo Electronics 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |