Correlation Between Hankuk Steel and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on Hankuk Steel and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and SKONEC Entertainment.
Diversification Opportunities for Hankuk Steel and SKONEC Entertainment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankuk and SKONEC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between Hankuk Steel and SKONEC Entertainment
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 1.61 times more return on investment than SKONEC Entertainment. However, Hankuk Steel is 1.61 times more volatile than SKONEC Entertainment Co. It trades about 0.27 of its potential returns per unit of risk. SKONEC Entertainment Co is currently generating about 0.2 per unit of risk. If you would invest 297,000 in Hankuk Steel Wire on September 25, 2024 and sell it today you would earn a total of 124,000 from holding Hankuk Steel Wire or generate 41.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hankuk Steel Wire vs. SKONEC Entertainment Co
Performance |
| Timeline |
| Hankuk Steel Wire |
| SKONEC Entertainment |
Hankuk Steel and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankuk Steel and SKONEC Entertainment
The main advantage of trading using opposite Hankuk Steel and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Lotte Chemical Corp |
| SKONEC Entertainment vs. Daesung Hi Tech Co | SKONEC Entertainment vs. Digital Power Communications | SKONEC Entertainment vs. Nice Information Telecommunication | SKONEC Entertainment vs. Hankuk Steel Wire |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |