Correlation Between Hwaseung Industries and Korea Real
Can any of the company-specific risk be diversified away by investing in both Hwaseung Industries and Korea Real 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 Hwaseung Industries and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwaseung Industries Co and Korea Real Estate, you can compare the effects of market volatilities on Hwaseung Industries and Korea Real 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 Hwaseung Industries with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwaseung Industries and Korea Real.
Diversification Opportunities for Hwaseung Industries and Korea Real
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hwaseung and Korea is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hwaseung Industries Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate and Hwaseung Industries 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 Hwaseung Industries Co are associated (or correlated) with Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Hwaseung Industries i.e., Hwaseung Industries and Korea Real go up and down completely randomly.
Pair Corralation between Hwaseung Industries and Korea Real
Assuming the 90 days trading horizon Hwaseung Industries Co is expected to generate 2.43 times more return on investment than Korea Real. However, Hwaseung Industries is 2.43 times more volatile than Korea Real Estate. It trades about 0.0 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.14 per unit of risk. If you would invest 419,000 in Hwaseung Industries Co on September 5, 2024 and sell it today you would lose (1,500) from holding Hwaseung Industries Co or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwaseung Industries Co vs. Korea Real Estate
Performance |
| Timeline |
| Hwaseung Industries |
| Korea Real Estate |
Hwaseung Industries and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwaseung Industries and Korea Real
The main advantage of trading using opposite Hwaseung Industries and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwaseung Industries position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Hwaseung Industries vs. Korea Real Estate | Hwaseung Industries vs. Busan Industrial Co | Hwaseung Industries vs. UNISEM Co | Hwaseung Industries vs. RPBio Inc |
| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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