Correlation Between Husteel and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both Husteel and Hwangkum 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 Husteel and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and Hwangkum Steel Technology, you can compare the effects of market volatilities on Husteel and Hwangkum 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 Husteel with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and Hwangkum Steel.
Diversification Opportunities for Husteel and Hwangkum Steel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Husteel and Hwangkum is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology and Husteel 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 Husteel are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of Husteel i.e., Husteel and Hwangkum Steel go up and down completely randomly.
Pair Corralation between Husteel and Hwangkum Steel
Assuming the 90 days trading horizon Husteel is expected to generate 1.54 times more return on investment than Hwangkum Steel. However, Husteel is 1.54 times more volatile than Hwangkum Steel Technology. It trades about 0.09 of its potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.15 per unit of risk. If you would invest 399,500 in Husteel on August 29, 2024 and sell it today you would earn a total of 13,500 from holding Husteel or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. Hwangkum Steel Technology
Performance |
| Timeline |
| Husteel |
| Hwangkum Steel Technology |
Husteel and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and Hwangkum Steel
The main advantage of trading using opposite Husteel and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel position performs unexpectedly, Hwangkum 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| Husteel vs. LG Chemicals | Husteel vs. Lotte Chemical Corp | Husteel vs. Hyundai Steel | Husteel vs. Seah Steel Corp |
| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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