Correlation Between Hankook Steel and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Seah 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 Seah 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 Seah Steel Corp, you can compare the effects of market volatilities on Hankook Steel and Seah 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 Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Seah Steel.
Diversification Opportunities for Hankook Steel and Seah Steel
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankook and Seah is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp 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 Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Hankook Steel i.e., Hankook Steel and Seah Steel go up and down completely randomly.
Pair Corralation between Hankook Steel and Seah Steel
Assuming the 90 days trading horizon Hankook Steel Co is expected to under-perform the Seah Steel. In addition to that, Hankook Steel is 1.57 times more volatile than Seah Steel Corp. It trades about -0.03 of its total potential returns per unit of risk. Seah Steel Corp is currently generating about 0.02 per unit of volatility. If you would invest 13,840,000 in Seah Steel Corp on November 27, 2024 and sell it today you would earn a total of 1,800,000 from holding Seah Steel Corp or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Steel Co vs. Seah Steel Corp
Performance |
| Timeline |
| Hankook Steel |
| Seah Steel Corp |
Hankook Steel and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Seah Steel
The main advantage of trading using opposite Hankook Steel and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Seah 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 Seah Steel will offset losses from the drop in Seah 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 |
| Seah Steel vs. Young Heung Iron | Seah Steel vs. Samsung Electronics Co | Seah Steel vs. Sungmoon Electronics Co | Seah Steel vs. Dongil 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |