Correlation Between HB Technology and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both HB Technology and Hwangkum 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 HB Technology and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and Hwangkum Steel Technology, you can compare the effects of market volatilities on HB Technology and Hwangkum 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 HB Technology with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Hwangkum Steel.
Diversification Opportunities for HB Technology and Hwangkum Steel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 078150 and Hwangkum is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology and HB Technology 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 HB Technology TD are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of HB Technology i.e., HB Technology and Hwangkum Steel go up and down completely randomly.
Pair Corralation between HB Technology and Hwangkum Steel
Assuming the 90 days trading horizon HB Technology TD is expected to under-perform the Hwangkum Steel. In addition to that, HB Technology is 3.37 times more volatile than Hwangkum Steel Technology. It trades about -0.07 of its total potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.12 per unit of volatility. If you would invest 672,000 in Hwangkum Steel Technology on September 3, 2024 and sell it today you would lose (156,000) from holding Hwangkum Steel Technology or give up 23.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Hwangkum Steel Technology
Performance |
| Timeline |
| HB Technology TD |
| Hwangkum Steel Technology |
HB Technology and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Hwangkum Steel
The main advantage of trading using opposite HB Technology and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Hwangkum 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| HB Technology vs. Dongsin Engineering Construction | HB Technology vs. Doosan Fuel Cell | HB Technology vs. Daishin Balance 1 | HB Technology vs. Total Soft Bank |
| Hwangkum Steel vs. DB Insurance Co | Hwangkum Steel vs. Jeju Beer Co | Hwangkum Steel vs. Korean Reinsurance Co | Hwangkum Steel vs. Dongbu Insurance Co |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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