Correlation Between Hankuk Steel and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Kbi Metal 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 Kbi Metal 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 Kbi Metal Co, you can compare the effects of market volatilities on Hankuk Steel and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Kbi Metal.
Diversification Opportunities for Hankuk Steel and Kbi Metal
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hankuk and Kbi is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Kbi Metal go up and down completely randomly.
Pair Corralation between Hankuk Steel and Kbi Metal
Assuming the 90 days trading horizon Hankuk Steel is expected to generate 1.17 times less return on investment than Kbi Metal. In addition to that, Hankuk Steel is 1.58 times more volatile than Kbi Metal Co. It trades about 0.1 of its total potential returns per unit of risk. Kbi Metal Co is currently generating about 0.19 per unit of volatility. If you would invest 187,100 in Kbi Metal Co on October 11, 2024 and sell it today you would earn a total of 22,400 from holding Kbi Metal Co or generate 11.97% 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. Kbi Metal Co
Performance |
| Timeline |
| Hankuk Steel Wire |
| Kbi Metal |
Hankuk Steel and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Kbi Metal
The main advantage of trading using opposite Hankuk Steel and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Hankuk Steel vs. Hyundai Industrial Co | Hankuk Steel vs. Hwasung Industrial Co | Hankuk Steel vs. Daesung Industrial Co | Hankuk Steel vs. Seoyon Topmetal Co |
| Kbi Metal vs. Daejung Chemicals Metals | Kbi Metal vs. Hankuk Steel Wire | Kbi Metal vs. Moonbae Steel | Kbi Metal vs. Dongbang Transport Logistics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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