Correlation Between Hankuk Steel and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Wonil Special 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 Hankuk Steel and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankuk Steel Wire and Wonil Special Steel, you can compare the effects of market volatilities on Hankuk Steel and Wonil Special 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 Hankuk Steel with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Wonil Special.
Diversification Opportunities for Hankuk Steel and Wonil Special
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hankuk and Wonil is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and Hankuk 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 Hankuk Steel Wire are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Wonil Special go up and down completely randomly.
Pair Corralation between Hankuk Steel and Wonil Special
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to under-perform the Wonil Special. In addition to that, Hankuk Steel is 1.23 times more volatile than Wonil Special Steel. It trades about -0.06 of its total potential returns per unit of risk. Wonil Special Steel is currently generating about -0.06 per unit of volatility. If you would invest 865,900 in Wonil Special Steel on September 2, 2024 and sell it today you would lose (137,900) from holding Wonil Special Steel or give up 15.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Wonil Special Steel
Performance |
| Timeline |
| Hankuk Steel Wire |
| Wonil Special Steel |
Hankuk Steel and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Wonil Special
The main advantage of trading using opposite Hankuk Steel and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Hyundai Steel |
| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Hanwha Solutions | Wonil Special vs. Hyundai Steel |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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