Correlation Between Han Kook and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Han Kook and SeAH Besteel 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 Han Kook and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Steel and SeAH Besteel Corp, you can compare the effects of market volatilities on Han Kook and SeAH Besteel 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 Han Kook with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and SeAH Besteel.
Diversification Opportunities for Han Kook and SeAH Besteel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Han and SeAH is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Han Kook 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 Han Kook Steel are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Han Kook i.e., Han Kook and SeAH Besteel go up and down completely randomly.
Pair Corralation between Han Kook and SeAH Besteel
Assuming the 90 days trading horizon Han Kook Steel is expected to generate 1.76 times more return on investment than SeAH Besteel. However, Han Kook is 1.76 times more volatile than SeAH Besteel Corp. It trades about 0.05 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about -0.17 per unit of risk. If you would invest 188,000 in Han Kook Steel on October 11, 2024 and sell it today you would earn a total of 4,500 from holding Han Kook Steel or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Han Kook Steel vs. SeAH Besteel Corp
Performance |
| Timeline |
| Han Kook Steel |
| SeAH Besteel Corp |
Han Kook and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and SeAH Besteel
The main advantage of trading using opposite Han Kook and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Han Kook vs. LG Display Co | Han Kook vs. LG Household Healthcare | Han Kook vs. Innowireless Co | Han Kook vs. Lotte Data Communication |
| SeAH Besteel vs. Hanjin Transportation Co | SeAH Besteel vs. Dongbang Transport Logistics | SeAH Besteel vs. Aprogen Healthcare Games | SeAH Besteel vs. Daishin Information Communications |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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