Correlation Between Hankook Steel and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Daechang Steel 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 Daechang Steel 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 Daechang Steel Co, you can compare the effects of market volatilities on Hankook Steel and Daechang Steel 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 Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Daechang Steel.
Diversification Opportunities for Hankook Steel and Daechang Steel
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hankook and Daechang is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang Steel 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 Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of Hankook Steel i.e., Hankook Steel and Daechang Steel go up and down completely randomly.
Pair Corralation between Hankook Steel and Daechang Steel
Assuming the 90 days trading horizon Hankook Steel Co is expected to under-perform the Daechang Steel. In addition to that, Hankook Steel is 1.88 times more volatile than Daechang Steel Co. It trades about -0.03 of its total potential returns per unit of risk. Daechang Steel Co is currently generating about -0.02 per unit of volatility. If you would invest 251,691 in Daechang Steel Co on November 27, 2024 and sell it today you would lose (45,191) from holding Daechang Steel Co or give up 17.95% 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. Daechang Steel Co
Performance |
| Timeline |
| Hankook Steel |
| Daechang Steel |
Hankook Steel and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Daechang Steel
The main advantage of trading using opposite Hankook Steel and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Daechang Steel 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 Daechang Steel will offset losses from the drop in Daechang Steel's long position.| Hankook Steel vs. Choil Aluminum | Hankook Steel vs. Cheryong Industrial CoLtd | Hankook Steel vs. Korea Shipbuilding Offshore | Hankook Steel vs. Kyeryong Construction Industrial |
| Daechang Steel vs. CKH Food Health | Daechang Steel vs. Automobile Pc | Daechang Steel vs. InnoTherapy | Daechang Steel vs. Ssangyong Information Communication |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |