Correlation Between GS Engineering and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Hankuk 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 GS Engineering and Hankuk Steel 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 Hankuk Steel Wire, you can compare the effects of market volatilities on GS Engineering and Hankuk 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 GS Engineering with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Hankuk Steel.
Diversification Opportunities for GS Engineering and Hankuk Steel
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006360 and Hankuk is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire 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 Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of GS Engineering i.e., GS Engineering and Hankuk Steel go up and down completely randomly.
Pair Corralation between GS Engineering and Hankuk Steel
Assuming the 90 days trading horizon GS Engineering Construction is expected to under-perform the Hankuk Steel. But the stock apears to be less risky and, when comparing its historical volatility, GS Engineering Construction is 2.91 times less risky than Hankuk Steel. The stock trades about -0.05 of its potential returns per unit of risk. The Hankuk Steel Wire is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 412,000 in Hankuk Steel Wire on October 14, 2024 and sell it today you would earn a total of 6,500 from holding Hankuk Steel Wire or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Hankuk Steel Wire
Performance |
| Timeline |
| GS Engineering Const |
| Hankuk Steel Wire |
GS Engineering and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Hankuk Steel
The main advantage of trading using opposite GS Engineering and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Hankuk 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| GS Engineering vs. ENF Technology Co | GS Engineering vs. Puloon Technology | GS Engineering vs. Daejung Chemicals Metals | GS Engineering vs. Eugene Technology CoLtd |
| Hankuk Steel vs. Mobile Appliance | Hankuk Steel vs. ENERGYMACHINERY KOREA CoLtd | Hankuk Steel vs. GS Engineering Construction | Hankuk Steel vs. Netmarble Games 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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