Correlation Between Hankuk Steel and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and PLAYWITH 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 PLAYWITH 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 PLAYWITH, you can compare the effects of market volatilities on Hankuk Steel and PLAYWITH 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 PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and PLAYWITH.
Diversification Opportunities for Hankuk Steel and PLAYWITH
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hankuk and PLAYWITH is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH 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 PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and PLAYWITH go up and down completely randomly.
Pair Corralation between Hankuk Steel and PLAYWITH
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 2.51 times more return on investment than PLAYWITH. However, Hankuk Steel is 2.51 times more volatile than PLAYWITH. It trades about 0.04 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.05 per unit of risk. If you would invest 413,000 in Hankuk Steel Wire on November 3, 2024 and sell it today you would earn a total of 6,000 from holding Hankuk Steel Wire or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. PLAYWITH
Performance |
| Timeline |
| Hankuk Steel Wire |
| PLAYWITH |
Hankuk Steel and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and PLAYWITH
The main advantage of trading using opposite Hankuk Steel and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| Hankuk Steel vs. Duksan Hi Metal | Hankuk Steel vs. Samsung Life Insurance | Hankuk Steel vs. PJ Metal Co | Hankuk Steel vs. Samick Musical Instruments |
| PLAYWITH vs. Hanwha Chemical Corp | PLAYWITH vs. Sung Bo Chemicals | PLAYWITH vs. Kisan Telecom Co | PLAYWITH vs. Kukdo Chemical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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