Correlation Between Youngsin Metal and Hankook Steel
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Hankook 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 Youngsin Metal and Hankook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngsin Metal Industrial and Hankook Steel Co, you can compare the effects of market volatilities on Youngsin Metal and Hankook 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 Youngsin Metal with a short position of Hankook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Hankook Steel.
Diversification Opportunities for Youngsin Metal and Hankook Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Youngsin and Hankook is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Hankook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Steel and Youngsin Metal 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 Youngsin Metal Industrial are associated (or correlated) with Hankook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Steel has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Hankook Steel go up and down completely randomly.
Pair Corralation between Youngsin Metal and Hankook Steel
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.27 times more return on investment than Hankook Steel. However, Youngsin Metal is 1.27 times more volatile than Hankook Steel Co. It trades about 0.03 of its potential returns per unit of risk. Hankook Steel Co is currently generating about -0.16 per unit of risk. If you would invest 218,000 in Youngsin Metal Industrial on October 30, 2024 and sell it today you would earn a total of 4,000 from holding Youngsin Metal Industrial or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Hankook Steel Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Hankook Steel |
Youngsin Metal and Hankook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Hankook Steel
The main advantage of trading using opposite Youngsin Metal and Hankook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Hankook 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 Hankook Steel will offset losses from the drop in Hankook Steel's long position.| Youngsin Metal vs. Daejoo Electronic Materials | Youngsin Metal vs. Top Material Co | Youngsin Metal vs. TOPMATERIAL LTD | Youngsin Metal vs. Hyundai Engineering Plastics |
| Hankook Steel vs. Kukdong Oil Chemicals | Hankook Steel vs. BIT Computer Co | Hankook Steel vs. CG Hi Tech | Hankook Steel vs. Kg Chemical |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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