Correlation Between Heungkuk Metaltech and Gyeongnam Steel
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Gyeongnam 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 Heungkuk Metaltech and Gyeongnam Steel 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 Gyeongnam Steel Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Gyeongnam 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 Heungkuk Metaltech with a short position of Gyeongnam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Gyeongnam Steel.
Diversification Opportunities for Heungkuk Metaltech and Gyeongnam Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Heungkuk and Gyeongnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Gyeongnam Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyeongnam Steel 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 Gyeongnam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyeongnam Steel has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Gyeongnam Steel go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Gyeongnam Steel
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Gyeongnam Steel. But the stock apears to be less risky and, when comparing its historical volatility, Heungkuk Metaltech CoLtd is 1.35 times less risky than Gyeongnam Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Gyeongnam Steel Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 292,000 in Gyeongnam Steel Co on August 31, 2024 and sell it today you would earn a total of 1,500 from holding Gyeongnam Steel Co or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Gyeongnam Steel Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Gyeongnam Steel |
Heungkuk Metaltech and Gyeongnam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Gyeongnam Steel
The main advantage of trading using opposite Heungkuk Metaltech and Gyeongnam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Gyeongnam 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 Gyeongnam Steel will offset losses from the drop in Gyeongnam Steel's long position.| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. ICD Co | Heungkuk Metaltech vs. DYPNF CoLtd | Heungkuk Metaltech vs. Busan Industrial Co |
| Gyeongnam Steel vs. Kbi Metal Co | Gyeongnam Steel vs. Heungkuk Metaltech CoLtd | Gyeongnam Steel vs. Hanjoo Light Metal | Gyeongnam Steel vs. Samlip General Foods |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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