Correlation Between Han Kook and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Han Kook and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Han Kook and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and BIT Computer.
Diversification Opportunities for Han Kook and BIT Computer
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Han and BIT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Han Kook i.e., Han Kook and BIT Computer go up and down completely randomly.
Pair Corralation between Han Kook and BIT Computer
Assuming the 90 days trading horizon Han Kook Steel is expected to under-perform the BIT Computer. In addition to that, Han Kook is 1.07 times more volatile than BIT Computer Co. It trades about -0.02 of its total potential returns per unit of risk. BIT Computer Co is currently generating about -0.01 per unit of volatility. If you would invest 718,950 in BIT Computer Co on October 27, 2024 and sell it today you would lose (229,950) from holding BIT Computer Co or give up 31.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. BIT Computer Co
Performance |
| Timeline |
| Han Kook Steel |
| BIT Computer |
Han Kook and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and BIT Computer
The main advantage of trading using opposite Han Kook and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Han Kook vs. Seah Steel Corp | Han Kook vs. Ajusteel Co | Han Kook vs. Ni Steel | Han Kook vs. Korea Steel Co |
| BIT Computer vs. SV Investment | BIT Computer vs. LB Investment | BIT Computer vs. Solus Advanced Materials | BIT Computer vs. NH Investment Securities |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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