Correlation Between Moonbae Steel and HuMC
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and HuMC 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 Moonbae Steel and HuMC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and HuMC Co, you can compare the effects of market volatilities on Moonbae Steel and HuMC 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 Moonbae Steel with a short position of HuMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and HuMC.
Diversification Opportunities for Moonbae Steel and HuMC
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Moonbae and HuMC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and HuMC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HuMC and Moonbae Steel 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 Moonbae Steel are associated (or correlated) with HuMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HuMC has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and HuMC go up and down completely randomly.
Pair Corralation between Moonbae Steel and HuMC
Assuming the 90 days trading horizon Moonbae Steel is expected to under-perform the HuMC. But the stock apears to be less risky and, when comparing its historical volatility, Moonbae Steel is 1.39 times less risky than HuMC. The stock trades about -0.03 of its potential returns per unit of risk. The HuMC Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 103,100 in HuMC Co on November 27, 2024 and sell it today you would lose (6,400) from holding HuMC Co or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. HuMC Co
Performance |
| Timeline |
| Moonbae Steel |
| HuMC |
Moonbae Steel and HuMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and HuMC
The main advantage of trading using opposite Moonbae Steel and HuMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, HuMC 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 HuMC will offset losses from the drop in HuMC's long position.| Moonbae Steel vs. Hana Technology Co | Moonbae Steel vs. Keum Kang Steel | Moonbae Steel vs. Hwangkum Steel Technology | Moonbae Steel vs. Fine Besteel Co |
| HuMC vs. Settlebank | HuMC vs. Hanwha Life Insurance | HuMC vs. Incar Financial Service | HuMC vs. Formetal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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