Correlation Between GS Engineering and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Hanil Iron 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 GS Engineering and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Hanil Iron Steel, you can compare the effects of market volatilities on GS Engineering and Hanil Iron 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 GS Engineering with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Hanil Iron.
Diversification Opportunities for GS Engineering and Hanil Iron
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 006360 and Hanil is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of GS Engineering i.e., GS Engineering and Hanil Iron go up and down completely randomly.
Pair Corralation between GS Engineering and Hanil Iron
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 1.62 times more return on investment than Hanil Iron. However, GS Engineering is 1.62 times more volatile than Hanil Iron Steel. It trades about -0.07 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about -0.15 per unit of risk. If you would invest 1,940,000 in GS Engineering Construction on October 28, 2024 and sell it today you would lose (158,000) from holding GS Engineering Construction or give up 8.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Hanil Iron Steel
Performance |
| Timeline |
| GS Engineering Const |
| Hanil Iron Steel |
GS Engineering and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Hanil Iron
The main advantage of trading using opposite GS Engineering and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| GS Engineering vs. Neungyule Education | GS Engineering vs. Kyung In Synthetic Corp | GS Engineering vs. CKH Food Health | GS Engineering vs. Youl Chon Chemical |
| Hanil Iron vs. KB Financial Group | Hanil Iron vs. Shinhan Financial Group | Hanil Iron vs. Hana Financial | Hanil Iron vs. Woori Financial Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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