Correlation Between Wonil Special and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Wonil Special and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Kukil Metal.
Diversification Opportunities for Wonil Special and Kukil Metal
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonil and Kukil is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Wonil Special i.e., Wonil Special and Kukil Metal go up and down completely randomly.
Pair Corralation between Wonil Special and Kukil Metal
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.76 times more return on investment than Kukil Metal. However, Wonil Special Steel is 1.32 times less risky than Kukil Metal. It trades about 0.09 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.33 per unit of risk. If you would invest 713,000 in Wonil Special Steel on September 2, 2024 and sell it today you would earn a total of 15,000 from holding Wonil Special Steel or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Kukil Metal Co
Performance |
| Timeline |
| Wonil Special Steel |
| Kukil Metal |
Wonil Special and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Kukil Metal
The main advantage of trading using opposite Wonil Special and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Hanwha Solutions | Wonil Special vs. Hyundai Steel |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. Jeil Steel Mfg | Kukil Metal vs. Daedong Steel 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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