Correlation Between Han Kook and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Han Kook and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Han Kook and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Kukil Metal.
Diversification Opportunities for Han Kook and Kukil Metal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Han and Kukil is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Han Kook i.e., Han Kook and Kukil Metal go up and down completely randomly.
Pair Corralation between Han Kook and Kukil Metal
Assuming the 90 days trading horizon Han Kook Steel is expected to under-perform the Kukil Metal. In addition to that, Han Kook is 1.48 times more volatile than Kukil Metal Co. It trades about -0.16 of its total potential returns per unit of risk. Kukil Metal Co is currently generating about 0.05 per unit of volatility. If you would invest 170,566 in Kukil Metal Co on October 30, 2024 and sell it today you would earn a total of 5,234 from holding Kukil Metal Co or generate 3.07% 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. Kukil Metal Co
Performance |
| Timeline |
| Han Kook Steel |
| Kukil Metal |
Han Kook and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Kukil Metal
The main advantage of trading using opposite Han Kook and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Han Kook vs. V One Tech Co | Han Kook vs. Hanshin Construction Co | Han Kook vs. Dongkuk Structures Construction | Han Kook vs. Woorim Machinery Co |
| Kukil Metal vs. Daejoo Electronic Materials | Kukil Metal vs. DB Insurance Co | Kukil Metal vs. RF Materials Co | Kukil Metal vs. Hyosung Advanced Materials |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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