Correlation Between BooKook Steel and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Hankuk 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 BooKook Steel and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BooKook Steel Co and Hankuk Steel Wire, you can compare the effects of market volatilities on BooKook Steel and Hankuk 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 BooKook Steel with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Hankuk Steel.
Diversification Opportunities for BooKook Steel and Hankuk Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BooKook and Hankuk is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire and BooKook 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 BooKook Steel Co are associated (or correlated) with Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of BooKook Steel i.e., BooKook Steel and Hankuk Steel go up and down completely randomly.
Pair Corralation between BooKook Steel and Hankuk Steel
Assuming the 90 days trading horizon BooKook Steel Co is expected to under-perform the Hankuk Steel. But the stock apears to be less risky and, when comparing its historical volatility, BooKook Steel Co is 1.02 times less risky than Hankuk Steel. The stock trades about -0.09 of its potential returns per unit of risk. The Hankuk Steel Wire is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 287,000 in Hankuk Steel Wire on September 2, 2024 and sell it today you would earn a total of 3,000 from holding Hankuk Steel Wire or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. Hankuk Steel Wire
Performance |
| Timeline |
| BooKook Steel |
| Hankuk Steel Wire |
BooKook Steel and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Hankuk Steel
The main advantage of trading using opposite BooKook Steel and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Hankuk 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| BooKook Steel vs. AptaBio Therapeutics | BooKook Steel vs. Daewoo SBI SPAC | BooKook Steel vs. Dream Security co | BooKook Steel vs. Microfriend |
| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Hyundai Steel |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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