Correlation Between Han Kook and Pharmsville
Can any of the company-specific risk be diversified away by investing in both Han Kook and Pharmsville 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 Pharmsville 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 Pharmsville Co, you can compare the effects of market volatilities on Han Kook and Pharmsville 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 Pharmsville. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Pharmsville.
Diversification Opportunities for Han Kook and Pharmsville
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Han and Pharmsville is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Pharmsville Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmsville 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 Pharmsville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmsville has no effect on the direction of Han Kook i.e., Han Kook and Pharmsville go up and down completely randomly.
Pair Corralation between Han Kook and Pharmsville
Assuming the 90 days trading horizon Han Kook Steel is expected to generate 1.5 times more return on investment than Pharmsville. However, Han Kook is 1.5 times more volatile than Pharmsville Co. It trades about 0.0 of its potential returns per unit of risk. Pharmsville Co is currently generating about -0.09 per unit of risk. If you would invest 293,000 in Han Kook Steel on September 3, 2024 and sell it today you would lose (77,500) from holding Han Kook Steel or give up 26.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. Pharmsville Co
Performance |
| Timeline |
| Han Kook Steel |
| Pharmsville |
Han Kook and Pharmsville Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Pharmsville
The main advantage of trading using opposite Han Kook and Pharmsville positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Pharmsville 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 Pharmsville will offset losses from the drop in Pharmsville's long position.| Han Kook vs. Seah Steel Corp | Han Kook vs. Ni Steel | Han Kook vs. Korea Steel Co | Han Kook vs. Bookook Steel |
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 CEOs Directory module to screen CEOs from public companies around the world.
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