Correlation Between Hwangkum Steel and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Daechang Steel 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 Daechang Steel 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 Daechang Steel Co, you can compare the effects of market volatilities on Hwangkum Steel and Daechang Steel 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 Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Daechang Steel.
Diversification Opportunities for Hwangkum Steel and Daechang Steel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Daechang is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang Steel 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 Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Daechang Steel go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Daechang Steel
Assuming the 90 days trading horizon Hwangkum Steel is expected to generate 1.59 times less return on investment than Daechang Steel. But when comparing it to its historical volatility, Hwangkum Steel Technology is 2.06 times less risky than Daechang Steel. It trades about 0.45 of its potential returns per unit of risk. Daechang Steel Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 189,169 in Daechang Steel Co on October 12, 2024 and sell it today you would earn a total of 20,831 from holding Daechang Steel Co or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Daechang Steel Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Daechang Steel |
Hwangkum Steel and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Daechang Steel
The main advantage of trading using opposite Hwangkum Steel and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Daechang Steel 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 Daechang Steel will offset losses from the drop in Daechang Steel's long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| Daechang Steel vs. Hwangkum Steel Technology | Daechang Steel vs. Industrial Bank | Daechang Steel vs. Clean Science co | Daechang Steel vs. NewFlex Technology 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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