Correlation Between Insun Environment and Hankook Steel
Can any of the company-specific risk be diversified away by investing in both Insun Environment 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 Insun Environment and Hankook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insun Environment New and Hankook Steel Co, you can compare the effects of market volatilities on Insun Environment 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 Insun Environment with a short position of Hankook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insun Environment and Hankook Steel.
Diversification Opportunities for Insun Environment and Hankook Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Insun and Hankook is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Insun Environment New and Hankook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Steel and Insun Environment 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 Insun Environment New 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 Insun Environment i.e., Insun Environment and Hankook Steel go up and down completely randomly.
Pair Corralation between Insun Environment and Hankook Steel
Assuming the 90 days trading horizon Insun Environment New is expected to generate 0.6 times more return on investment than Hankook Steel. However, Insun Environment New is 1.67 times less risky than Hankook Steel. It trades about 0.44 of its potential returns per unit of risk. Hankook Steel Co is currently generating about 0.01 per unit of risk. If you would invest 491,500 in Insun Environment New on October 13, 2024 and sell it today you would earn a total of 78,500 from holding Insun Environment New or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insun Environment New vs. Hankook Steel Co
Performance |
| Timeline |
| Insun Environment New |
| Hankook Steel |
Insun Environment and Hankook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insun Environment and Hankook Steel
The main advantage of trading using opposite Insun Environment and Hankook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insun Environment 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.| Insun Environment vs. Jin Air Co | Insun Environment vs. Hanwha Life Insurance | Insun Environment vs. Haitai Confectionery Foods | Insun Environment vs. Hanjin Transportation Co |
| Hankook Steel vs. Hana Financial | Hankook Steel vs. Insun Environment New | Hankook Steel vs. Woori Financial Group | Hankook Steel vs. Shinhan Financial Group |
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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