Correlation Between Heungkuk Metaltech and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Haesung Industrial.
Diversification Opportunities for Heungkuk Metaltech and Haesung Industrial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heungkuk and Haesung is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Haesung Industrial go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Haesung Industrial
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.88 times more return on investment than Haesung Industrial. However, Heungkuk Metaltech CoLtd is 1.14 times less risky than Haesung Industrial. It trades about -0.09 of its potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.3 per unit of risk. If you would invest 491,000 in Heungkuk Metaltech CoLtd on August 27, 2024 and sell it today you would lose (12,500) from holding Heungkuk Metaltech CoLtd or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Haesung Industrial Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Haesung Industrial |
Heungkuk Metaltech and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Haesung Industrial
The main advantage of trading using opposite Heungkuk Metaltech and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Heungkuk Metaltech vs. Seoyon Topmetal Co | Heungkuk Metaltech vs. PlayD Co | Heungkuk Metaltech vs. PJ Metal Co | Heungkuk Metaltech vs. Songwon Industrial Co |
| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Mirae Asset Daewoo | Haesung Industrial vs. UNISEM 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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