Correlation Between Stic Investments and Han Kook
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Han Kook 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 Stic Investments and Han Kook into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Han Kook Steel, you can compare the effects of market volatilities on Stic Investments and Han Kook 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 Stic Investments with a short position of Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Han Kook.
Diversification Opportunities for Stic Investments and Han Kook
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stic and Han is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel and Stic Investments 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 Stic Investments are associated (or correlated) with Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of Stic Investments i.e., Stic Investments and Han Kook go up and down completely randomly.
Pair Corralation between Stic Investments and Han Kook
Assuming the 90 days trading horizon Stic Investments is expected to generate 0.8 times more return on investment than Han Kook. However, Stic Investments is 1.25 times less risky than Han Kook. It trades about 0.05 of its potential returns per unit of risk. Han Kook Steel is currently generating about -0.04 per unit of risk. If you would invest 602,993 in Stic Investments on August 31, 2024 and sell it today you would earn a total of 225,007 from holding Stic Investments or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Han Kook Steel
Performance |
| Timeline |
| Stic Investments |
| Han Kook Steel |
Stic Investments and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Han Kook
The main advantage of trading using opposite Stic Investments and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Stic Investments vs. Dongsin Engineering Construction | Stic Investments vs. Doosan Fuel Cell | Stic Investments vs. Daishin Balance 1 | Stic Investments vs. Total Soft Bank |
| Han Kook vs. Dong Il Steel | Han Kook vs. Seah Steel Corp | Han Kook vs. Ajusteel Co | Han Kook vs. Korea 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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