Correlation Between Hankook Furniture and SK IE
Can any of the company-specific risk be diversified away by investing in both Hankook Furniture and SK IE 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 SK IE 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 SK IE Technology, you can compare the effects of market volatilities on Hankook Furniture and SK IE 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 SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Furniture and SK IE.
Diversification Opportunities for Hankook Furniture and SK IE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and 361610 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Furniture Co and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology 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 SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Hankook Furniture i.e., Hankook Furniture and SK IE go up and down completely randomly.
Pair Corralation between Hankook Furniture and SK IE
Assuming the 90 days trading horizon Hankook Furniture Co is expected to generate 0.61 times more return on investment than SK IE. However, Hankook Furniture Co is 1.64 times less risky than SK IE. It trades about 0.25 of its potential returns per unit of risk. SK IE Technology is currently generating about -0.23 per unit of risk. If you would invest 369,500 in Hankook Furniture Co on August 29, 2024 and sell it today you would earn a total of 42,000 from holding Hankook Furniture Co or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Furniture Co vs. SK IE Technology
Performance |
| Timeline |
| Hankook Furniture |
| SK IE Technology |
Hankook Furniture and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Furniture and SK IE
The main advantage of trading using opposite Hankook Furniture and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Furniture position performs unexpectedly, SK IE 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 SK IE will offset losses from the drop in SK IE's long position.| Hankook Furniture vs. KMH Hitech Co | Hankook Furniture vs. GemVaxKAEL CoLtd | Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind |
| SK IE vs. Polaris Office Corp | SK IE vs. Hankook Furniture Co | SK IE vs. ITM Semiconductor Co | SK IE vs. Eugene Investment Securities |
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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