Correlation Between Hankuk Steel and Ubiquoss Holdings
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Ubiquoss Holdings 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 Ubiquoss Holdings 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 Ubiquoss Holdings, you can compare the effects of market volatilities on Hankuk Steel and Ubiquoss Holdings 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 Ubiquoss Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Ubiquoss Holdings.
Diversification Opportunities for Hankuk Steel and Ubiquoss Holdings
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankuk and Ubiquoss is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Ubiquoss Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquoss Holdings 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 Ubiquoss Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquoss Holdings has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Ubiquoss Holdings go up and down completely randomly.
Pair Corralation between Hankuk Steel and Ubiquoss Holdings
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 1.68 times more return on investment than Ubiquoss Holdings. However, Hankuk Steel is 1.68 times more volatile than Ubiquoss Holdings. It trades about 0.02 of its potential returns per unit of risk. Ubiquoss Holdings is currently generating about -0.08 per unit of risk. If you would invest 394,478 in Hankuk Steel Wire on September 14, 2024 and sell it today you would earn a total of 21,022 from holding Hankuk Steel Wire or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Ubiquoss Holdings
Performance |
| Timeline |
| Hankuk Steel Wire |
| Ubiquoss Holdings |
Hankuk Steel and Ubiquoss Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Ubiquoss Holdings
The main advantage of trading using opposite Hankuk Steel and Ubiquoss Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Ubiquoss Holdings 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 Ubiquoss Holdings will offset losses from the drop in Ubiquoss Holdings' long position.| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Lotte Chemical Corp |
| Ubiquoss Holdings vs. Sempio Foods Co | Ubiquoss Holdings vs. Hankuk Steel Wire | Ubiquoss Holdings vs. Hironic Co | Ubiquoss Holdings vs. CJ Seafood Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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