Correlation Between Heungkuk Metaltech and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Hanshin Construction 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 Heungkuk Metaltech and Hanshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Hanshin Construction Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Hanshin Construction 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 Heungkuk Metaltech with a short position of Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Hanshin Construction.
Diversification Opportunities for Heungkuk Metaltech and Hanshin Construction
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Heungkuk and Hanshin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd are associated (or correlated) with Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Hanshin Construction go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Hanshin Construction
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Hanshin Construction. In addition to that, Heungkuk Metaltech is 1.33 times more volatile than Hanshin Construction Co. It trades about -0.09 of its total potential returns per unit of risk. Hanshin Construction Co is currently generating about 0.01 per unit of volatility. If you would invest 628,000 in Hanshin Construction Co on October 28, 2024 and sell it today you would earn a total of 1,000.00 from holding Hanshin Construction Co or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Hanshin Construction Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Hanshin Construction |
Heungkuk Metaltech and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Hanshin Construction
The main advantage of trading using opposite Heungkuk Metaltech and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Heungkuk Metaltech vs. Bosung Power Technology | Heungkuk Metaltech vs. Lotte Rental Co | Heungkuk Metaltech vs. Narae Nanotech Corp | Heungkuk Metaltech vs. RFTech Co |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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