Correlation Between Hankuk Steel and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Hankuk Steel and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and DSC Investment.
Diversification Opportunities for Hankuk Steel and DSC Investment
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankuk and DSC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and DSC Investment go up and down completely randomly.
Pair Corralation between Hankuk Steel and DSC Investment
Assuming the 90 days trading horizon Hankuk Steel is expected to generate 1.28 times less return on investment than DSC Investment. But when comparing it to its historical volatility, Hankuk Steel Wire is 1.41 times less risky than DSC Investment. It trades about 0.0 of its potential returns per unit of risk. DSC Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 306,500 in DSC Investment on September 12, 2024 and sell it today you would lose (27,500) from holding DSC Investment or give up 8.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankuk Steel Wire vs. DSC Investment
Performance |
| Timeline |
| Hankuk Steel Wire |
| DSC Investment |
Hankuk Steel and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and DSC Investment
The main advantage of trading using opposite Hankuk Steel and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Lotte Chemical Corp |
| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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