Correlation Between Barunson Entertainment and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both Barunson Entertainment and Hankuk 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 Barunson Entertainment and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barunson Entertainment Arts and Hankuk Steel Wire, you can compare the effects of market volatilities on Barunson Entertainment and Hankuk 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 Barunson Entertainment with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barunson Entertainment and Hankuk Steel.
Diversification Opportunities for Barunson Entertainment and Hankuk Steel
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barunson and Hankuk is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barunson Entertainment Arts and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire and Barunson Entertainment 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 Barunson Entertainment Arts are associated (or correlated) with Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of Barunson Entertainment i.e., Barunson Entertainment and Hankuk Steel go up and down completely randomly.
Pair Corralation between Barunson Entertainment and Hankuk Steel
Assuming the 90 days trading horizon Barunson Entertainment is expected to generate 4.56 times less return on investment than Hankuk Steel. But when comparing it to its historical volatility, Barunson Entertainment Arts is 2.4 times less risky than Hankuk Steel. It trades about 0.02 of its potential returns per unit of risk. Hankuk Steel Wire is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 412,000 in Hankuk Steel Wire on October 14, 2024 and sell it today you would earn a total of 6,500 from holding Hankuk Steel Wire or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barunson Entertainment Arts vs. Hankuk Steel Wire
Performance |
| Timeline |
| Barunson Entertainment |
| Hankuk Steel Wire |
Barunson Entertainment and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barunson Entertainment and Hankuk Steel
The main advantage of trading using opposite Barunson Entertainment and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barunson Entertainment position performs unexpectedly, Hankuk 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| Barunson Entertainment vs. INSUN Environmental New | Barunson Entertainment vs. Korea Computer | Barunson Entertainment vs. Daechang Steel Co | Barunson Entertainment vs. Hankook Steel Co |
| Hankuk Steel vs. Nice Information Telecommunication | Hankuk Steel vs. Jeong Moon Information | Hankuk Steel vs. Barunson Entertainment Arts | Hankuk Steel vs. Alton Sports CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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