Correlation Between Hankuk Steel and Korea Information
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Hankuk Steel and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Korea Information.
Diversification Opportunities for Hankuk Steel and Korea Information
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankuk and Korea is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Korea Information go up and down completely randomly.
Pair Corralation between Hankuk Steel and Korea Information
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 4.47 times more return on investment than Korea Information. However, Hankuk Steel is 4.47 times more volatile than Korea Information Communications. It trades about 0.07 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.1 per unit of risk. If you would invest 403,500 in Hankuk Steel Wire on October 25, 2024 and sell it today you would earn a total of 17,500 from holding Hankuk Steel Wire or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Korea Information Communicatio
Performance |
| Timeline |
| Hankuk Steel Wire |
| Korea Information |
Hankuk Steel and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Korea Information
The main advantage of trading using opposite Hankuk Steel and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Hankuk Steel vs. PLAYWITH | Hankuk Steel vs. Pureun Mutual Savings | Hankuk Steel vs. KB Financial Group | Hankuk Steel vs. Settlebank |
| Korea Information vs. Samsung Electronics Co | Korea Information vs. Samsung Electronics Co | Korea Information vs. SK Hynix | Korea Information vs. HMM 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |