Correlation Between Hankuk Steel and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Samjin LND 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 Samjin LND 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 Samjin LND Co, you can compare the effects of market volatilities on Hankuk Steel and Samjin LND 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 Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Samjin LND.
Diversification Opportunities for Hankuk Steel and Samjin LND
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hankuk and Samjin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND 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 Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Samjin LND go up and down completely randomly.
Pair Corralation between Hankuk Steel and Samjin LND
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 0.6 times more return on investment than Samjin LND. However, Hankuk Steel Wire is 1.67 times less risky than Samjin LND. It trades about -0.04 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.08 per unit of risk. If you would invest 422,044 in Hankuk Steel Wire on September 3, 2024 and sell it today you would lose (132,044) from holding Hankuk Steel Wire or give up 31.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Samjin LND Co
Performance |
| Timeline |
| Hankuk Steel Wire |
| Samjin LND |
Hankuk Steel and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Samjin LND
The main advantage of trading using opposite Hankuk Steel and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Hankuk Steel vs. Youngbo Chemical Co | Hankuk Steel vs. Daelim Industrial Co | Hankuk Steel vs. Kumho Industrial Co | Hankuk Steel vs. Pungguk Ethanol Industrial |
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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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