Correlation Between Hankook Furniture and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture 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 Hankook Furniture and Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on Hankook Furniture 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 Hankook Furniture with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Duksan Hi.
Diversification Opportunities for Hankook Furniture and Duksan Hi
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hankook and Duksan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture 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 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 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 Hankook Furniture i.e., Hankook Furniture and Duksan Hi go up and down completely randomly.
Pair Corralation between Hankook Furniture and Duksan Hi
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.39 times more return on investment than Duksan Hi. However, Hankook Furniture Co is 2.57 times less risky than Duksan Hi. It trades about 0.0 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.01 per unit of risk. If you would invest 420,209 in Hankook Furniture Co on October 30, 2024 and sell it today you would lose (17,209) from holding Hankook Furniture Co or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Hankook Furniture |
| Duksan Hi Metal |
Hankook Furniture and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Duksan Hi
The main advantage of trading using opposite Hankook Furniture and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture 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.| Hankook Furniture vs. Samsung Electronics Co | Hankook Furniture vs. Samsung Electronics Co | Hankook Furniture vs. KB Financial Group | Hankook Furniture vs. Shinhan Financial Group |
| Duksan Hi vs. Shinhan Inverse Silver | Duksan Hi vs. JYP Entertainment Corp | Duksan Hi vs. YG Entertainment | Duksan Hi vs. Barunson Entertainment Arts |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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