Correlation Between Hwangkum Steel and Coloray International
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and Coloray International 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 Coloray International 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 Coloray International Investment, you can compare the effects of market volatilities on Hwangkum Steel and Coloray International 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 Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Coloray International.
Diversification Opportunities for Hwangkum Steel and Coloray International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwangkum and Coloray is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International 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 Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and Coloray International go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Coloray International
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Coloray International. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 1.93 times less risky than Coloray International. The stock trades about -0.11 of its potential returns per unit of risk. The Coloray International Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 81,100 in Coloray International Investment on November 3, 2024 and sell it today you would lose (4,400) from holding Coloray International Investment or give up 5.43% 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. Coloray International Investme
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Coloray International |
Hwangkum Steel and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Coloray International
The main advantage of trading using opposite Hwangkum Steel and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| Hwangkum Steel vs. Bookook Steel | Hwangkum Steel vs. Wonil Special Steel | Hwangkum Steel vs. Insung Information Co | Hwangkum Steel vs. Dong A Steel Technology |
| Coloray International vs. Lotte Data Communication | Coloray International vs. CG Hi Tech | Coloray International vs. Jeong Moon Information | Coloray International vs. Daishin Information Communications |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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