Correlation Between Hwangkum Steel and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Bosung 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 Hwangkum Steel and Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Hwangkum Steel and Bosung 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 Hwangkum Steel with a short position of Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Bosung Power.
Diversification Opportunities for Hwangkum Steel and Bosung Power
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Bosung is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Bosung Power go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Bosung Power
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Bosung Power. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 2.91 times less risky than Bosung Power. The stock trades about -0.11 of its potential returns per unit of risk. The Bosung Power Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 310,000 in Bosung Power Technology on November 3, 2024 and sell it today you would lose (12,000) from holding Bosung Power Technology or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Bosung Power Technology
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Bosung Power Technology |
Hwangkum Steel and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Bosung Power
The main advantage of trading using opposite Hwangkum Steel and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Bosung 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Hwangkum Steel vs. Bookook Steel | Hwangkum Steel vs. Wonil Special Steel | Hwangkum Steel vs. Insung Information Co | Hwangkum Steel vs. Dong A Steel Technology |
| Bosung Power vs. Hironic Co | Bosung Power vs. SS TECH | Bosung Power vs. Yura Tech Co | Bosung Power vs. Hankook 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 Stocks Directory module to find actively traded stocks across global markets.
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