Correlation Between Hankook Steel and Withuspharmaceutical
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Withuspharmaceutical 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 Withuspharmaceutical 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 Withuspharmaceutical CoLtd, you can compare the effects of market volatilities on Hankook Steel and Withuspharmaceutical 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 Withuspharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Withuspharmaceutical.
Diversification Opportunities for Hankook Steel and Withuspharmaceutical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hankook and Withuspharmaceutical is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Withuspharmaceutical CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Withuspharmaceutical 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 Withuspharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Withuspharmaceutical has no effect on the direction of Hankook Steel i.e., Hankook Steel and Withuspharmaceutical go up and down completely randomly.
Pair Corralation between Hankook Steel and Withuspharmaceutical
Assuming the 90 days trading horizon Hankook Steel Co is expected to generate 1.85 times more return on investment than Withuspharmaceutical. However, Hankook Steel is 1.85 times more volatile than Withuspharmaceutical CoLtd. It trades about 0.0 of its potential returns per unit of risk. Withuspharmaceutical CoLtd is currently generating about -0.1 per unit of risk. If you would invest 196,600 in Hankook Steel Co on September 12, 2024 and sell it today you would lose (8,600) from holding Hankook Steel Co or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankook Steel Co vs. Withuspharmaceutical CoLtd
Performance |
| Timeline |
| Hankook Steel |
| Withuspharmaceutical |
Hankook Steel and Withuspharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Withuspharmaceutical
The main advantage of trading using opposite Hankook Steel and Withuspharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Withuspharmaceutical 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 Withuspharmaceutical will offset losses from the drop in Withuspharmaceutical's long position.| Hankook Steel vs. Samsung Electronics Co | Hankook Steel vs. Samsung Electronics Co | Hankook Steel vs. SK Hynix | Hankook Steel vs. POSCO Holdings |
| Withuspharmaceutical vs. Dongbu Insurance Co | Withuspharmaceutical vs. Samsung Life Insurance | Withuspharmaceutical vs. Namhwa Industrial Co | Withuspharmaceutical vs. Insung Information 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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