Correlation Between Han Kook and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Han Kook and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Han Kook and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Finebesteel.
Diversification Opportunities for Han Kook and Finebesteel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Han and Finebesteel is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Han Kook i.e., Han Kook and Finebesteel go up and down completely randomly.
Pair Corralation between Han Kook and Finebesteel
Assuming the 90 days trading horizon Han Kook Steel is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Han Kook Steel is 2.13 times less risky than Finebesteel. The stock trades about -0.16 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 100,200 in Finebesteel on October 23, 2024 and sell it today you would earn a total of 14,000 from holding Finebesteel or generate 13.97% 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. Finebesteel
Performance |
| Timeline |
| Han Kook Steel |
| Finebesteel |
Han Kook and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Finebesteel
The main advantage of trading using opposite Han Kook and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Han Kook vs. Samick Musical Instruments | Han Kook vs. Genie Music | Han Kook vs. Histeel | Han Kook vs. Hyundai BNG Steel |
| Finebesteel vs. Seoul Electronics Telecom | Finebesteel vs. Nable Communications | Finebesteel vs. PJ Electronics Co | Finebesteel vs. DAEDUCK ELECTRONICS CoLtd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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