Correlation Between Hwangkum Steel and Home Center
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Home Center 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 Home Center 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 Home Center Holdings, you can compare the effects of market volatilities on Hwangkum Steel and Home Center 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 Home Center. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Home Center.
Diversification Opportunities for Hwangkum Steel and Home Center
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Home is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Home Center Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Center Holdings 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 Home Center. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Center Holdings has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Home Center go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Home Center
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to generate 0.65 times more return on investment than Home Center. However, Hwangkum Steel Technology is 1.53 times less risky than Home Center. It trades about -0.1 of its potential returns per unit of risk. Home Center Holdings is currently generating about -0.09 per unit of risk. If you would invest 693,439 in Hwangkum Steel Technology on September 2, 2024 and sell it today you would lose (177,439) from holding Hwangkum Steel Technology or give up 25.59% 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. Home Center Holdings
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Home Center Holdings |
Hwangkum Steel and Home Center Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Home Center
The main advantage of trading using opposite Hwangkum Steel and Home Center positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Home Center 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 Home Center will offset losses from the drop in Home Center's long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| Home Center vs. LG Chemicals | Home Center vs. POSCO Holdings | Home Center vs. Hanwha Solutions | Home Center vs. Hyundai Steel |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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