Correlation Between Hankook Steel and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Leaders Technology 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 Leaders Technology 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 Leaders Technology Investment, you can compare the effects of market volatilities on Hankook Steel and Leaders Technology 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 Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Leaders Technology.
Diversification Opportunities for Hankook Steel and Leaders Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hankook and Leaders is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of Hankook Steel i.e., Hankook Steel and Leaders Technology go up and down completely randomly.
Pair Corralation between Hankook Steel and Leaders Technology
Assuming the 90 days trading horizon Hankook Steel Co is expected to generate 0.61 times more return on investment than Leaders Technology. However, Hankook Steel Co is 1.64 times less risky than Leaders Technology. It trades about -0.03 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about -0.05 per unit of risk. If you would invest 338,500 in Hankook Steel Co on November 2, 2024 and sell it today you would lose (158,300) from holding Hankook Steel Co or give up 46.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.08% |
| Values | Daily Returns |
Hankook Steel Co vs. Leaders Technology Investment
Performance |
| Timeline |
| Hankook Steel |
| Leaders Technology |
Hankook Steel and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Leaders Technology
The main advantage of trading using opposite Hankook Steel and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| Hankook Steel vs. AptaBio Therapeutics | Hankook Steel vs. Daewoo SBI SPAC | Hankook Steel vs. Dream Security co | Hankook Steel vs. Microfriend |
| Leaders Technology vs. Hyundai BNG Steel | Leaders Technology vs. Korea Steel Co | Leaders Technology vs. Jeju Bank | Leaders Technology vs. Fine Besteel 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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