Correlation Between HS Valve and Han Kook
Can any of the company-specific risk be diversified away by investing in both HS Valve and Han Kook 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 HS Valve and Han Kook into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HS Valve Co and Han Kook Steel, you can compare the effects of market volatilities on HS Valve and Han Kook 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 HS Valve with a short position of Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of HS Valve and Han Kook.
Diversification Opportunities for HS Valve and Han Kook
Average diversification
The 3 months correlation between 039610 and Han is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HS Valve Co and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel and HS Valve 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 HS Valve Co are associated (or correlated) with Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of HS Valve i.e., HS Valve and Han Kook go up and down completely randomly.
Pair Corralation between HS Valve and Han Kook
Assuming the 90 days trading horizon HS Valve Co is expected to generate 1.62 times more return on investment than Han Kook. However, HS Valve is 1.62 times more volatile than Han Kook Steel. It trades about 0.08 of its potential returns per unit of risk. Han Kook Steel is currently generating about -0.01 per unit of risk. If you would invest 533,000 in HS Valve Co on September 1, 2024 and sell it today you would earn a total of 583,000 from holding HS Valve Co or generate 109.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
HS Valve Co vs. Han Kook Steel
Performance |
| Timeline |
| HS Valve |
| Han Kook Steel |
HS Valve and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HS Valve and Han Kook
The main advantage of trading using opposite HS Valve and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HS Valve position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| HS Valve vs. COWINTECH Co | HS Valve vs. Young Poong Precision | HS Valve vs. Seoam Machinery Industry | HS Valve vs. Haisung TPC Co |
| Han Kook vs. Seah Steel Corp | Han Kook vs. Ajusteel Co | Han Kook vs. Korea Steel Co | Han Kook vs. Samwon Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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