Correlation Between Hankuk Steel and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance, you can compare the effects of market volatilities on Hankuk Steel and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Mobile Appliance.
Diversification Opportunities for Hankuk Steel and Mobile Appliance
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankuk and Mobile is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Mobile Appliance go up and down completely randomly.
Pair Corralation between Hankuk Steel and Mobile Appliance
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 1.45 times more return on investment than Mobile Appliance. However, Hankuk Steel is 1.45 times more volatile than Mobile Appliance. It trades about 0.16 of its potential returns per unit of risk. Mobile Appliance is currently generating about 0.0 per unit of risk. If you would invest 284,500 in Hankuk Steel Wire on October 14, 2024 and sell it today you would earn a total of 134,000 from holding Hankuk Steel Wire or generate 47.1% 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. Mobile Appliance
Performance |
| Timeline |
| Hankuk Steel Wire |
| Mobile Appliance |
Hankuk Steel and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Mobile Appliance
The main advantage of trading using opposite Hankuk Steel and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| Hankuk Steel vs. Nice Information Telecommunication | Hankuk Steel vs. Jeong Moon Information | Hankuk Steel vs. Barunson Entertainment Arts | Hankuk Steel vs. Alton Sports CoLtd |
| Mobile Appliance vs. DONGKUK TED METAL | Mobile Appliance vs. Hankuk Steel Wire | Mobile Appliance vs. Heungkuk Metaltech CoLtd | Mobile Appliance vs. Kukil Metal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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