Correlation Between Han Kook and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both Han Kook and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on Han Kook and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Daeduck Electronics.
Diversification Opportunities for Han Kook and Daeduck Electronics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Han and Daeduck is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of Han Kook i.e., Han Kook and Daeduck Electronics go up and down completely randomly.
Pair Corralation between Han Kook and Daeduck Electronics
Assuming the 90 days trading horizon Han Kook Steel is expected to generate 6.35 times more return on investment than Daeduck Electronics. However, Han Kook is 6.35 times more volatile than Daeduck Electronics Co. It trades about 0.09 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.35 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. Daeduck Electronics Co
Performance |
| Timeline |
| Han Kook Steel |
| Daeduck Electronics |
Han Kook and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Daeduck Electronics
The main advantage of trading using opposite Han Kook and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| Han Kook vs. Seah Steel Corp | Han Kook vs. Ni Steel | Han Kook vs. Korea Steel Co | Han Kook vs. Bookook Steel |
| Daeduck Electronics vs. Kukil Metal Co | Daeduck Electronics vs. Display Tech Co | Daeduck Electronics vs. Seoyon Topmetal Co | Daeduck Electronics vs. Formetal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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