Correlation Between Hankook Steel and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Hankook Steel and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on Hankook Steel and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankook Steel and Wireless Power.
Diversification Opportunities for Hankook Steel and Wireless Power
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hankook and Wireless is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hankook Steel Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Hankook Steel i.e., Hankook Steel and Wireless Power go up and down completely randomly.
Pair Corralation between Hankook Steel and Wireless Power
Assuming the 90 days trading horizon Hankook Steel Co is expected to generate 1.04 times more return on investment than Wireless Power. However, Hankook Steel is 1.04 times more volatile than Wireless Power Amplifier. It trades about -0.01 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.01 per unit of risk. If you would invest 266,000 in Hankook Steel Co on September 12, 2024 and sell it today you would lose (78,000) from holding Hankook Steel Co or give up 29.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hankook Steel Co vs. Wireless Power Amplifier
Performance |
| Timeline |
| Hankook Steel |
| Wireless Power Amplifier |
Hankook Steel and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankook Steel and Wireless Power
The main advantage of trading using opposite Hankook Steel and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankook Steel position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power'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 |
| Wireless Power vs. SK Chemicals Co | Wireless Power vs. Wave Electronics Co | Wireless Power vs. Cuckoo Electronics Co | Wireless Power vs. Sung Bo Chemicals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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