Correlation Between Hwangkum Steel and Korea Petro
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Korea Petro 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 Korea Petro 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 Korea Petro Chemical, you can compare the effects of market volatilities on Hwangkum Steel and Korea Petro 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 Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Korea Petro.
Diversification Opportunities for Hwangkum Steel and Korea Petro
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hwangkum and Korea is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical 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 Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Korea Petro go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Korea Petro
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Korea Petro. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 2.36 times less risky than Korea Petro. The stock trades about -0.09 of its potential returns per unit of risk. The Korea Petro Chemical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 11,286,300 in Korea Petro Chemical on October 16, 2024 and sell it today you would lose (2,756,300) from holding Korea Petro Chemical or give up 24.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Korea Petro Chemical
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Korea Petro Chemical |
Hwangkum Steel and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Korea Petro
The main advantage of trading using opposite Hwangkum Steel and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| Korea Petro vs. FNSTech Co | Korea Petro vs. Sungchang Autotech Co | Korea Petro vs. Hwangkum Steel Technology | Korea Petro vs. Lion Chemtech 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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