Correlation Between Hankuk Steel and BYON Co
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and BYON Co 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 BYON Co 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 BYON Co, you can compare the effects of market volatilities on Hankuk Steel and BYON Co 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 BYON Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and BYON Co.
Diversification Opportunities for Hankuk Steel and BYON Co
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankuk and BYON is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and BYON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYON Co 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 BYON Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYON Co has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and BYON Co go up and down completely randomly.
Pair Corralation between Hankuk Steel and BYON Co
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 0.46 times more return on investment than BYON Co. However, Hankuk Steel Wire is 2.19 times less risky than BYON Co. It trades about 0.0 of its potential returns per unit of risk. BYON Co is currently generating about -0.03 per unit of risk. If you would invest 405,038 in Hankuk Steel Wire on December 6, 2024 and sell it today you would lose (40,538) from holding Hankuk Steel Wire or give up 10.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.37% |
| Values | Daily Returns |
Hankuk Steel Wire vs. BYON Co
Performance |
| Timeline |
| Hankuk Steel Wire |
| BYON Co |
Hankuk Steel and BYON Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and BYON Co
The main advantage of trading using opposite Hankuk Steel and BYON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, BYON Co 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 BYON Co will offset losses from the drop in BYON Co's long position.| Hankuk Steel vs. PJ Metal Co | Hankuk Steel vs. Formetal Co | Hankuk Steel vs. Daiyang Metal Co | Hankuk Steel vs. Kakao Games Corp |
| BYON Co vs. Nice Information Telecommunication | BYON Co vs. Seoyon Topmetal Co | BYON Co vs. Industrial Bank | BYON Co vs. Ssangyong Information Communication |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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