Correlation Between Hwangkum Steel and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Dongbang Transport 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 Hwangkum Steel and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwangkum Steel Technology and Dongbang Transport Logistics, you can compare the effects of market volatilities on Hwangkum Steel and Dongbang Transport 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 Hwangkum Steel with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Dongbang Transport.
Diversification Opportunities for Hwangkum Steel and Dongbang Transport
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hwangkum and Dongbang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Hwangkum 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 Hwangkum Steel Technology are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Dongbang Transport go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Dongbang Transport
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Dongbang Transport. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 1.89 times less risky than Dongbang Transport. The stock trades about -0.03 of its potential returns per unit of risk. The Dongbang Transport Logistics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 259,000 in Dongbang Transport Logistics on October 12, 2024 and sell it today you would lose (29,500) from holding Dongbang Transport Logistics or give up 11.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Dongbang Transport |
Hwangkum Steel and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Dongbang Transport
The main advantage of trading using opposite Hwangkum Steel and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| Dongbang Transport vs. Hwangkum Steel Technology | Dongbang Transport vs. Asia Technology Co | Dongbang Transport vs. BIT Computer Co | Dongbang Transport vs. PJ Electronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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