Correlation Between Hankook Furniture and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on Hankook Furniture and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and Shin Steel.
Diversification Opportunities for Hankook Furniture and Shin Steel
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hankook and Shin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and Shin Steel go up and down completely randomly.
Pair Corralation between Hankook Furniture and Shin Steel
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.42 times more return on investment than Shin Steel. However, Hankook Furniture Co is 2.37 times less risky than Shin Steel. It trades about 0.04 of its potential returns per unit of risk. Shin Steel Co is currently generating about -0.05 per unit of risk. If you would invest 376,462 in Hankook Furniture Co on October 18, 2024 and sell it today you would earn a total of 22,538 from holding Hankook Furniture Co or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. Shin Steel Co
Performance |
| Timeline |
| Hankook Furniture |
| Shin Steel |
Hankook Furniture and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and Shin Steel
The main advantage of trading using opposite Hankook Furniture and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Hankook Furniture vs. Heungkuk Metaltech CoLtd | Hankook Furniture vs. Miwon Chemicals Co | Hankook Furniture vs. Shinhan Inverse Copper | Hankook Furniture vs. Duksan Hi Metal |
| Shin Steel vs. Sam Yang Foods | Shin Steel vs. Shinil Industrial Co | Shin Steel vs. Drb Industrial | Shin Steel vs. Hankook Furniture 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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