Correlation Between Hankook Steel and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Hankook Steel and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Taegu Broadcasting.
Diversification Opportunities for Hankook Steel and Taegu Broadcasting
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankook and Taegu is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Hankook Steel i.e., Hankook Steel and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Hankook Steel and Taegu Broadcasting
Assuming the 90 days trading horizon Hankook Steel Co is expected to under-perform the Taegu Broadcasting. In addition to that, Hankook Steel is 1.91 times more volatile than Taegu Broadcasting. It trades about -0.04 of its total potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.01 per unit of volatility. If you would invest 91,064 in Taegu Broadcasting on November 4, 2024 and sell it today you would lose (6,764) from holding Taegu Broadcasting or give up 7.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Steel Co vs. Taegu Broadcasting
Performance |
| Timeline |
| Hankook Steel |
| Taegu Broadcasting |
Hankook Steel and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Taegu Broadcasting
The main advantage of trading using opposite Hankook Steel and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Hankook Steel vs. Seers Technology | Hankook Steel vs. NewFlex Technology Co | Hankook Steel vs. Kisan Telecom Co | Hankook Steel vs. Seoul Electronics Telecom |
| Taegu Broadcasting vs. Haitai Confectionery Foods | Taegu Broadcasting vs. Heungkuk Metaltech CoLtd | Taegu Broadcasting vs. Hankukpackage Co | Taegu Broadcasting vs. UJU Electronics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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