Correlation Between Hwangkum Steel and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Hwangkum Steel and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Alton Sports.
Diversification Opportunities for Hwangkum Steel and Alton Sports
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Alton is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Alton Sports go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Alton Sports
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to generate 0.84 times more return on investment than Alton Sports. However, Hwangkum Steel Technology is 1.18 times less risky than Alton Sports. It trades about -0.16 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.35 per unit of risk. If you would invest 527,000 in Hwangkum Steel Technology on September 4, 2024 and sell it today you would lose (23,000) from holding Hwangkum Steel Technology or give up 4.36% 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. Alton Sports CoLtd
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Alton Sports CoLtd |
Hwangkum Steel and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Alton Sports
The main advantage of trading using opposite Hwangkum Steel and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Hwangkum Steel vs. Duksan Hi Metal | Hwangkum Steel vs. Daejung Chemicals Metals | Hwangkum Steel vs. Taeyang Metal Industrial | Hwangkum Steel vs. Top Material Co |
| Alton Sports vs. Korea Real Estate | Alton Sports vs. Busan Industrial Co | Alton Sports vs. UNISEM Co | Alton Sports vs. RPBio Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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