Correlation Between Hwangkum Steel and Daedong Gear
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Daedong Gear 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 Daedong Gear 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 Daedong Gear Co, you can compare the effects of market volatilities on Hwangkum Steel and Daedong Gear 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 Daedong Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Daedong Gear.
Diversification Opportunities for Hwangkum Steel and Daedong Gear
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hwangkum and Daedong is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Daedong Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Gear 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 Daedong Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Gear has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Daedong Gear go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Daedong Gear
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Daedong Gear. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 2.74 times less risky than Daedong Gear. The stock trades about -0.03 of its potential returns per unit of risk. The Daedong Gear Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 728,276 in Daedong Gear Co on September 12, 2024 and sell it today you would earn a total of 876,724 from holding Daedong Gear Co or generate 120.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Daedong Gear Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Daedong Gear |
Hwangkum Steel and Daedong Gear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Daedong Gear
The main advantage of trading using opposite Hwangkum Steel and Daedong Gear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Daedong Gear 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 Daedong Gear will offset losses from the drop in Daedong Gear's long position.| Hwangkum Steel vs. FoodNamoo | Hwangkum Steel vs. Samji Electronics Co | Hwangkum Steel vs. UJU Electronics Co | Hwangkum Steel vs. ABCO Electronics Co |
| Daedong Gear vs. Innowireless Co | Daedong Gear vs. Shinsung Delta Tech | Daedong Gear vs. Amogreentech Co | Daedong Gear vs. Hwangkum Steel Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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