Correlation Between Daishin Information and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both Daishin Information 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 Daishin Information and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Hankuk Steel Wire, you can compare the effects of market volatilities on Daishin Information 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 Daishin Information with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Hankuk Steel.
Diversification Opportunities for Daishin Information and Hankuk Steel
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daishin and Hankuk is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat 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 Daishin Information 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 Daishin Information Communications 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 Daishin Information i.e., Daishin Information and Hankuk Steel go up and down completely randomly.
Pair Corralation between Daishin Information and Hankuk Steel
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 0.7 times more return on investment than Hankuk Steel. However, Daishin Information Communications is 1.43 times less risky than Hankuk Steel. It trades about 0.03 of its potential returns per unit of risk. Hankuk Steel Wire is currently generating about -0.38 per unit of risk. If you would invest 106,000 in Daishin Information Communications on November 18, 2024 and sell it today you would earn a total of 900.00 from holding Daishin Information Communications or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Hankuk Steel Wire
Performance |
| Timeline |
| Daishin Information |
| Hankuk Steel Wire |
Daishin Information and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Hankuk Steel
The main advantage of trading using opposite Daishin Information and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information 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.| Daishin Information vs. Inzi Display CoLtd | Daishin Information vs. Tway Air Co | Daishin Information vs. PlayD Co | Daishin Information vs. Grand Korea Leisure |
| Hankuk Steel vs. Lotte Fine Chemical | Hankuk Steel vs. KPX Green Chemical | Hankuk Steel vs. SK Chemicals Co | Hankuk Steel vs. Hannong Chemicals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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