Correlation Between Hanshin Construction and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction and Moonbae 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 Hanshin Construction and Moonbae Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Moonbae Steel, you can compare the effects of market volatilities on Hanshin Construction and Moonbae 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 Hanshin Construction with a short position of Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Moonbae Steel.
Diversification Opportunities for Hanshin Construction and Moonbae Steel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanshin and Moonbae is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel and Hanshin Construction 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 Hanshin Construction Co are associated (or correlated) with Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of Hanshin Construction i.e., Hanshin Construction and Moonbae Steel go up and down completely randomly.
Pair Corralation between Hanshin Construction and Moonbae Steel
Assuming the 90 days trading horizon Hanshin Construction Co is expected to generate 1.08 times more return on investment than Moonbae Steel. However, Hanshin Construction is 1.08 times more volatile than Moonbae Steel. It trades about 0.02 of its potential returns per unit of risk. Moonbae Steel is currently generating about 0.02 per unit of risk. If you would invest 667,000 in Hanshin Construction Co on September 12, 2024 and sell it today you would earn a total of 3,000 from holding Hanshin Construction Co or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. Moonbae Steel
Performance |
| Timeline |
| Hanshin Construction |
| Moonbae Steel |
Hanshin Construction and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Moonbae Steel
The main advantage of trading using opposite Hanshin Construction and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction position performs unexpectedly, Moonbae 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| Hanshin Construction vs. Samsung Electronics Co | Hanshin Construction vs. Samsung Electronics Co | Hanshin Construction vs. SK Hynix | Hanshin Construction vs. POSCO Holdings |
| Moonbae Steel vs. LG Chemicals | Moonbae Steel vs. POSCO Holdings | Moonbae Steel vs. Hanwha Solutions | Moonbae Steel vs. Lotte Chemical Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |