Correlation Between Hankook Steel and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Myoung Shin 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 Myoung Shin 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 Myoung Shin Industrial, you can compare the effects of market volatilities on Hankook Steel and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Myoung Shin.
Diversification Opportunities for Hankook Steel and Myoung Shin
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hankook and Myoung is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Hankook Steel i.e., Hankook Steel and Myoung Shin go up and down completely randomly.
Pair Corralation between Hankook Steel and Myoung Shin
Assuming the 90 days trading horizon Hankook Steel Co is expected to generate 1.71 times more return on investment than Myoung Shin. However, Hankook Steel is 1.71 times more volatile than Myoung Shin Industrial. It trades about 0.05 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.16 per unit of risk. If you would invest 198,500 in Hankook Steel Co on September 4, 2024 and sell it today you would earn a total of 6,000 from holding Hankook Steel Co or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Steel Co vs. Myoung Shin Industrial
Performance |
| Timeline |
| Hankook Steel |
| Myoung Shin Industrial |
Hankook Steel and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Myoung Shin
The main advantage of trading using opposite Hankook Steel and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Hankook Steel vs. SCI Information Service | Hankook Steel vs. SH Energy Chemical | Hankook Steel vs. Hyosung Chemical Corp | Hankook Steel vs. Namhae Chemical |
| Myoung Shin vs. Heungkuk Metaltech CoLtd | Myoung Shin vs. Daejung Chemicals Metals | Myoung Shin vs. Histeel | Myoung Shin vs. Hankook Steel Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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