Correlation Between Hankuk Steel and Genic
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and Genic 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 Genic 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 Genic Co, you can compare the effects of market volatilities on Hankuk Steel and Genic 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 Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and Genic.
Diversification Opportunities for Hankuk Steel and Genic
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hankuk and Genic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic 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 Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and Genic go up and down completely randomly.
Pair Corralation between Hankuk Steel and Genic
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 0.77 times more return on investment than Genic. However, Hankuk Steel Wire is 1.3 times less risky than Genic. It trades about 0.07 of its potential returns per unit of risk. Genic Co is currently generating about -0.19 per unit of risk. If you would invest 406,000 in Hankuk Steel Wire on November 7, 2024 and sell it today you would earn a total of 13,000 from holding Hankuk Steel Wire or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. Genic Co
Performance |
| Timeline |
| Hankuk Steel Wire |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Genic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Hankuk Steel and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and Genic
The main advantage of trading using opposite Hankuk Steel and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| Hankuk Steel vs. A Tech Solution Co | Hankuk Steel vs. Orbitech Co | Hankuk Steel vs. Hansol Chemical Co | Hankuk Steel vs. Narae Nanotech 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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