Correlation Between Hankuk Steel and Chin Yang
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Chin Yang 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 Chin Yang 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 Chin Yang Chemical, you can compare the effects of market volatilities on Hankuk Steel and Chin Yang 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 Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Chin Yang.
Diversification Opportunities for Hankuk Steel and Chin Yang
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hankuk and Chin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical 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 Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Chin Yang go up and down completely randomly.
Pair Corralation between Hankuk Steel and Chin Yang
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to under-perform the Chin Yang. But the stock apears to be less risky and, when comparing its historical volatility, Hankuk Steel Wire is 2.09 times less risky than Chin Yang. The stock trades about -0.06 of its potential returns per unit of risk. The Chin Yang Chemical is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 322,500 in Chin Yang Chemical on November 30, 2024 and sell it today you would earn a total of 135,000 from holding Chin Yang Chemical or generate 41.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Chin Yang Chemical
Performance |
| Timeline |
| Hankuk Steel Wire |
| Chin Yang Chemical |
Hankuk Steel and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Chin Yang
The main advantage of trading using opposite Hankuk Steel and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| Hankuk Steel vs. Netmarble Games Corp | Hankuk Steel vs. Clean Science co | Hankuk Steel vs. Hyosung Advanced Materials | Hankuk Steel vs. WONIK Materials CoLtd |
| Chin Yang vs. Innowireless Co | Chin Yang vs. Automobile Pc | Chin Yang vs. Duksan Hi Metal | Chin Yang vs. Hotel Shilla 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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