Correlation Between Hwangkum Steel and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Sungdo Engineering 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 Sungdo Engineering 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 Sungdo Engineering Construction, you can compare the effects of market volatilities on Hwangkum Steel and Sungdo Engineering 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 Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Sungdo Engineering.
Diversification Opportunities for Hwangkum Steel and Sungdo Engineering
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hwangkum and Sungdo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering 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 Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Sungdo Engineering
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to generate 0.43 times more return on investment than Sungdo Engineering. However, Hwangkum Steel Technology is 2.34 times less risky than Sungdo Engineering. It trades about 0.39 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about -0.32 per unit of risk. If you would invest 473,076 in Hwangkum Steel Technology on October 20, 2024 and sell it today you would earn a total of 25,424 from holding Hwangkum Steel Technology or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Sungdo Engineering |
Hwangkum Steel and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Sungdo Engineering
The main advantage of trading using opposite Hwangkum Steel and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Hwangkum Steel vs. Daejung Chemicals Metals | Hwangkum Steel vs. Sung Bo Chemicals | Hwangkum Steel vs. KT Submarine Telecom | Hwangkum Steel vs. Ssangyong Information Communication |
| Sungdo Engineering vs. Ewon Comfortech Co | Sungdo Engineering vs. Raontech | Sungdo Engineering vs. RFTech Co | Sungdo Engineering vs. V One Tech 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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