Correlation Between Jeong Moon and Hankook Steel
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Hankook 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 Jeong Moon and Hankook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and Hankook Steel Co, you can compare the effects of market volatilities on Jeong Moon and Hankook 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 Jeong Moon with a short position of Hankook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Hankook Steel.
Diversification Opportunities for Jeong Moon and Hankook Steel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeong and Hankook is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Hankook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Steel and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with Hankook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Steel has no effect on the direction of Jeong Moon i.e., Jeong Moon and Hankook Steel go up and down completely randomly.
Pair Corralation between Jeong Moon and Hankook Steel
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Hankook Steel. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 1.97 times less risky than Hankook Steel. The stock trades about -0.06 of its potential returns per unit of risk. The Hankook Steel Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 198,800 in Hankook Steel Co on October 14, 2024 and sell it today you would lose (9,700) from holding Hankook Steel Co or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Hankook Steel Co
Performance |
| Timeline |
| Jeong Moon Information |
| Hankook Steel |
Jeong Moon and Hankook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Hankook Steel
The main advantage of trading using opposite Jeong Moon and Hankook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Hankook 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 Hankook Steel will offset losses from the drop in Hankook Steel's long position.| Jeong Moon vs. Hyosung Advanced Materials | Jeong Moon vs. CKH Food Health | Jeong Moon vs. Kolon Plastics | Jeong Moon vs. RF Materials Co |
| Hankook Steel vs. Ssangyong Information Communication | Hankook Steel vs. Kakao Games Corp | Hankook Steel vs. Koryo Credit Information | Hankook Steel vs. Jeong Moon Information |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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