Correlation Between Han Kook and Nature
Can any of the company-specific risk be diversified away by investing in both Han Kook and Nature 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 Nature 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 Nature and Environment, you can compare the effects of market volatilities on Han Kook and Nature 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 Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Nature.
Diversification Opportunities for Han Kook and Nature
Weak diversification
The 3 months correlation between Han and Nature is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment 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 Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of Han Kook i.e., Han Kook and Nature go up and down completely randomly.
Pair Corralation between Han Kook and Nature
Assuming the 90 days trading horizon Han Kook Steel is expected to generate 1.38 times more return on investment than Nature. However, Han Kook is 1.38 times more volatile than Nature and Environment. It trades about -0.04 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.06 per unit of risk. If you would invest 298,500 in Han Kook Steel on October 16, 2024 and sell it today you would lose (109,700) from holding Han Kook Steel or give up 36.75% 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. Nature and Environment
Performance |
| Timeline |
| Han Kook Steel |
| Nature and Environment |
Han Kook and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Nature
The main advantage of trading using opposite Han Kook and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| Han Kook vs. Osang Healthcare Co,Ltd | Han Kook vs. CKH Food Health | Han Kook vs. LG Household Healthcare | Han Kook vs. Aprogen Healthcare Games |
| Nature vs. Woori Financial Group | Nature vs. Jb Financial | Nature vs. Nh Investment And | Nature vs. Hyundai Heavy Industries |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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