Correlation Between Hwangkum Steel and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech Co, you can compare the effects of market volatilities on Hwangkum Steel and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Lion Chemtech.
Diversification Opportunities for Hwangkum Steel and Lion Chemtech
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hwangkum and Lion is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Lion Chemtech go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Lion Chemtech
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Lion Chemtech. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 2.0 times less risky than Lion Chemtech. The stock trades about -0.14 of its potential returns per unit of risk. The Lion Chemtech Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 259,500 in Lion Chemtech Co on September 5, 2024 and sell it today you would lose (9,500) from holding Lion Chemtech Co or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Lion Chemtech Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Lion Chemtech |
Hwangkum Steel and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Lion Chemtech
The main advantage of trading using opposite Hwangkum Steel and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |