Correlation Between Seoyon Topmetal and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Hankuk 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 Seoyon Topmetal and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoyon Topmetal Co and Hankuk Steel Wire, you can compare the effects of market volatilities on Seoyon Topmetal and Hankuk 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 Seoyon Topmetal with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Hankuk Steel.
Diversification Opportunities for Seoyon Topmetal and Hankuk Steel
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Seoyon and Hankuk is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Hankuk Steel go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Hankuk Steel
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to under-perform the Hankuk Steel. But the stock apears to be less risky and, when comparing its historical volatility, Seoyon Topmetal Co is 1.03 times less risky than Hankuk Steel. The stock trades about -0.01 of its potential returns per unit of risk. The Hankuk Steel Wire is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 417,696 in Hankuk Steel Wire on October 11, 2024 and sell it today you would lose (10,696) from holding Hankuk Steel Wire or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Hankuk Steel Wire
Performance |
| Timeline |
| Seoyon Topmetal |
| Hankuk Steel Wire |
Seoyon Topmetal and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Hankuk Steel
The main advantage of trading using opposite Seoyon Topmetal and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Hankuk 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| Seoyon Topmetal vs. iNtRON Biotechnology | Seoyon Topmetal vs. Aprogen Healthcare Games | Seoyon Topmetal vs. InnoTherapy | Seoyon Topmetal vs. Eugene Technology CoLtd |
| Hankuk Steel vs. Hanshin Construction Co | Hankuk Steel vs. Kyeryong Construction Industrial | Hankuk Steel vs. ENERGYMACHINERY KOREA CoLtd | Hankuk Steel vs. KCC Engineering Construction |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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