Correlation Between Han Kook and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Han Kook and Hanil Iron 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 Hanil Iron 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 Hanil Iron Steel, you can compare the effects of market volatilities on Han Kook and Hanil Iron 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 Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Hanil Iron.
Diversification Opportunities for Han Kook and Hanil Iron
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Han and Hanil is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel 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 Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Han Kook i.e., Han Kook and Hanil Iron go up and down completely randomly.
Pair Corralation between Han Kook and Hanil Iron
Assuming the 90 days trading horizon Han Kook Steel is expected to generate 3.52 times more return on investment than Hanil Iron. However, Han Kook is 3.52 times more volatile than Hanil Iron Steel. It trades about 0.09 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about 0.1 per unit of risk. If you would invest 198,500 in Han Kook Steel on September 3, 2024 and sell it today you would earn a total of 17,000 from holding Han Kook Steel or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. Hanil Iron Steel
Performance |
| Timeline |
| Han Kook Steel |
| Hanil Iron Steel |
Han Kook and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Hanil Iron
The main advantage of trading using opposite Han Kook and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Han Kook vs. Seah Steel Corp | Han Kook vs. Ni Steel | Han Kook vs. Korea Steel Co | Han Kook vs. Bookook Steel |
| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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