Correlation Between Hwangkum Steel and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and SK Chemicals 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 SK Chemicals 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 SK Chemicals Co, you can compare the effects of market volatilities on Hwangkum Steel and SK Chemicals 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 SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and SK Chemicals.
Diversification Opportunities for Hwangkum Steel and SK Chemicals
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and 285130 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals 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 SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and SK Chemicals go up and down completely randomly.
Pair Corralation between Hwangkum Steel and SK Chemicals
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to generate 0.43 times more return on investment than SK Chemicals. However, Hwangkum Steel Technology is 2.35 times less risky than SK Chemicals. It trades about 0.45 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.08 per unit of risk. If you would invest 463,867 in Hwangkum Steel Technology on October 12, 2024 and sell it today you would earn a total of 33,633 from holding Hwangkum Steel Technology or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. SK Chemicals Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| SK Chemicals |
Hwangkum Steel and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and SK Chemicals
The main advantage of trading using opposite Hwangkum Steel and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| SK Chemicals vs. BIT Computer Co | SK Chemicals vs. Hwangkum Steel Technology | SK Chemicals vs. Asia Technology Co | SK Chemicals vs. KG Eco 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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