Correlation Between Hwangkum Steel and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology Co, you can compare the effects of market volatilities on Hwangkum Steel and Guyoung Technology 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 Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Guyoung Technology.
Diversification Opportunities for Hwangkum Steel and Guyoung Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Guyoung is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung 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 Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Guyoung Technology go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Guyoung Technology
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Guyoung Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 1.39 times less risky than Guyoung Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Guyoung Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 256,971 in Guyoung Technology Co on October 27, 2024 and sell it today you would lose (29,971) from holding Guyoung Technology Co or give up 11.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Guyoung Technology Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Guyoung Technology |
Hwangkum Steel and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Guyoung Technology
The main advantage of trading using opposite Hwangkum Steel and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.| Hwangkum Steel vs. ECSTELECOM Co | Hwangkum Steel vs. PLAYWITH | Hwangkum Steel vs. PJ Metal Co | Hwangkum Steel vs. Lotte Data Communication |
| Guyoung Technology vs. Jahwa Electronics Co | Guyoung Technology vs. Shinil Electronics Co | Guyoung Technology vs. HB Technology TD | Guyoung Technology vs. Dong A 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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