Correlation Between Husteel and SS TECH
Can any of the company-specific risk be diversified away by investing in both Husteel and SS TECH 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 SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and SS TECH, you can compare the effects of market volatilities on Husteel and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and SS TECH.
Diversification Opportunities for Husteel and SS TECH
Weak diversification
The 3 months correlation between Husteel and 101490 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of Husteel i.e., Husteel and SS TECH go up and down completely randomly.
Pair Corralation between Husteel and SS TECH
Assuming the 90 days trading horizon Husteel is expected to generate 4.45 times less return on investment than SS TECH. But when comparing it to its historical volatility, Husteel is 1.29 times less risky than SS TECH. It trades about 0.0 of its potential returns per unit of risk. SS TECH is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,749,796 in SS TECH on August 25, 2024 and sell it today you would lose (449,796) from holding SS TECH or give up 16.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. SS TECH
Performance |
| Timeline |
| Husteel |
| SS TECH |
Husteel and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and SS TECH
The main advantage of trading using opposite Husteel and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| Husteel vs. Korean Reinsurance Co | Husteel vs. Samsung Life Insurance | Husteel vs. Hansol Chemical Co | Husteel vs. Youl Chon Chemical |
| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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