Correlation Between Korea Zinc and Hanyang ENG
Can any of the company-specific risk be diversified away by investing in both Korea Zinc and Hanyang ENG 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 Korea Zinc and Hanyang ENG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Zinc and Hanyang ENG Co, you can compare the effects of market volatilities on Korea Zinc and Hanyang ENG 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 Korea Zinc with a short position of Hanyang ENG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Zinc and Hanyang ENG.
Diversification Opportunities for Korea Zinc and Hanyang ENG
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Hanyang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korea Zinc and Hanyang ENG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanyang ENG and Korea Zinc 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 Korea Zinc are associated (or correlated) with Hanyang ENG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanyang ENG has no effect on the direction of Korea Zinc i.e., Korea Zinc and Hanyang ENG go up and down completely randomly.
Pair Corralation between Korea Zinc and Hanyang ENG
Assuming the 90 days trading horizon Korea Zinc is expected to generate 0.93 times more return on investment than Hanyang ENG. However, Korea Zinc is 1.08 times less risky than Hanyang ENG. It trades about 0.04 of its potential returns per unit of risk. Hanyang ENG Co is currently generating about 0.03 per unit of risk. If you would invest 48,328,900 in Korea Zinc on January 22, 2025 and sell it today you would earn a total of 20,071,100 from holding Korea Zinc or generate 41.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korea Zinc vs. Hanyang ENG Co
Performance |
| Timeline |
| Korea Zinc |
| Hanyang ENG |
Korea Zinc and Hanyang ENG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Zinc and Hanyang ENG
The main advantage of trading using opposite Korea Zinc and Hanyang ENG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Zinc position performs unexpectedly, Hanyang ENG 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 Hanyang ENG will offset losses from the drop in Hanyang ENG's long position.| Korea Zinc vs. LG Household Healthcare | Korea Zinc vs. Aekyung Industrial Co | Korea Zinc vs. Hyundai Industrial Co | Korea Zinc vs. Youngsin Metal Industrial |
| Hanyang ENG vs. FNC Entertainment Co | Hanyang ENG vs. Alton Sports CoLtd | Hanyang ENG vs. Innowireless Co | Hanyang ENG vs. Barunson Entertainment Arts |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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