Correlation Between Dongbu Steel and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Dongbu Steel and Hanwha InvestmentSecuri 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 Dongbu Steel and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbu Steel Co and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Dongbu Steel and Hanwha InvestmentSecuri 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 Dongbu Steel with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Steel and Hanwha InvestmentSecuri.
Diversification Opportunities for Dongbu Steel and Hanwha InvestmentSecuri
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongbu and Hanwha is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Steel Co and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Dongbu Steel 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 Dongbu Steel Co are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Dongbu Steel i.e., Dongbu Steel and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Dongbu Steel and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Dongbu Steel Co is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Dongbu Steel Co is 3.36 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.03 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 511,000 in Hanwha InvestmentSecurities Co on September 1, 2024 and sell it today you would earn a total of 201,000 from holding Hanwha InvestmentSecurities Co or generate 39.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Steel Co vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Dongbu Steel |
| Hanwha InvestmentSecuri |
Dongbu Steel and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Steel and Hanwha InvestmentSecuri
The main advantage of trading using opposite Dongbu Steel and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Steel position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Dongbu Steel vs. LG Chemicals | Dongbu Steel vs. POSCO Holdings | Dongbu Steel vs. Hanwha Solutions | Dongbu Steel vs. Hyundai Steel |
| Hanwha InvestmentSecuri vs. Solution Advanced Technology | Hanwha InvestmentSecuri vs. Busan Industrial Co | Hanwha InvestmentSecuri vs. Busan Ind | Hanwha InvestmentSecuri vs. Mirae Asset Daewoo |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |