Correlation Between Wonil Special and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Hanil Iron 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 Wonil Special and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonil Special Steel and Hanil Iron Steel, you can compare the effects of market volatilities on Wonil Special and Hanil Iron 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 Wonil Special with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Hanil Iron.
Diversification Opportunities for Wonil Special and Hanil Iron
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wonil and Hanil is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Wonil Special 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 Wonil Special Steel are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Wonil Special i.e., Wonil Special and Hanil Iron go up and down completely randomly.
Pair Corralation between Wonil Special and Hanil Iron
Assuming the 90 days trading horizon Wonil Special Steel is expected to under-perform the Hanil Iron. But the stock apears to be less risky and, when comparing its historical volatility, Wonil Special Steel is 1.22 times less risky than Hanil Iron. The stock trades about -0.11 of its potential returns per unit of risk. The Hanil Iron Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 201,500 in Hanil Iron Steel on September 13, 2024 and sell it today you would earn a total of 1,500 from holding Hanil Iron Steel or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Hanil Iron Steel
Performance |
| Timeline |
| Wonil Special Steel |
| Hanil Iron Steel |
Wonil Special and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Hanil Iron
The main advantage of trading using opposite Wonil Special and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Hanwha Solutions | Wonil Special vs. Lotte Chemical Corp |
| Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. Samsung Electronics Co | Hanil Iron vs. SK Hynix | Hanil Iron vs. POSCO Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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