Correlation Between Hankook Steel and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Sung Bo 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 Hankook Steel and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankook Steel Co and Sung Bo Chemicals, you can compare the effects of market volatilities on Hankook Steel and Sung Bo 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 Hankook Steel with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Sung Bo.
Diversification Opportunities for Hankook Steel and Sung Bo
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and Sung is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Hankook Steel 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 Hankook Steel Co are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Hankook Steel i.e., Hankook Steel and Sung Bo go up and down completely randomly.
Pair Corralation between Hankook Steel and Sung Bo
Assuming the 90 days trading horizon Hankook Steel Co is expected to under-perform the Sung Bo. In addition to that, Hankook Steel is 1.86 times more volatile than Sung Bo Chemicals. It trades about -0.16 of its total potential returns per unit of risk. Sung Bo Chemicals is currently generating about 0.15 per unit of volatility. If you would invest 248,000 in Sung Bo Chemicals on October 30, 2024 and sell it today you would earn a total of 5,000 from holding Sung Bo Chemicals or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Steel Co vs. Sung Bo Chemicals
Performance |
| Timeline |
| Hankook Steel |
| Sung Bo Chemicals |
Hankook Steel and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Sung Bo
The main advantage of trading using opposite Hankook Steel and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Hankook Steel vs. Kukdong Oil Chemicals | Hankook Steel vs. BIT Computer Co | Hankook Steel vs. CG Hi Tech | Hankook Steel vs. Kg Chemical |
| Sung Bo vs. DB Insurance Co | Sung Bo vs. Pyung Hwa Industrial | Sung Bo vs. Korea Industrial Co | Sung Bo vs. Korean Air Lines |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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