Correlation Between Hwangkum Steel and Korea Information
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on Hwangkum Steel and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Korea Information.
Diversification Opportunities for Hwangkum Steel and Korea Information
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hwangkum and Korea is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Korea Information go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Korea Information
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Korea Information. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 1.08 times less risky than Korea Information. The stock trades about -0.13 of its potential returns per unit of risk. The Korea Information Communications is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 887,000 in Korea Information Communications on September 3, 2024 and sell it today you would lose (75,000) from holding Korea Information Communications or give up 8.46% 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 Information Communicatio
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Korea Information |
Hwangkum Steel and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Korea Information
The main advantage of trading using opposite Hwangkum Steel and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Hwangkum Steel vs. DB Insurance Co | Hwangkum Steel vs. Jeju Beer Co | Hwangkum Steel vs. Korean Reinsurance Co | Hwangkum Steel vs. Dongbu Insurance Co |
| Korea Information vs. Cloud Air CoLtd | Korea Information vs. Genie Music | Korea Information vs. Samlip General Foods | Korea Information vs. Organic Special Pet |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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