Correlation Between HB Technology and Shin Steel
Can any of the company-specific risk be diversified away by investing in both HB Technology and Shin 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 Shin 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 Shin Steel Co, you can compare the effects of market volatilities on HB Technology and Shin 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Shin Steel.
Diversification Opportunities for HB Technology and Shin Steel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 078150 and Shin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of HB Technology i.e., HB Technology and Shin Steel go up and down completely randomly.
Pair Corralation between HB Technology and Shin Steel
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.26 times more return on investment than Shin Steel. However, HB Technology is 1.26 times more volatile than Shin Steel Co. It trades about 0.14 of its potential returns per unit of risk. Shin Steel Co is currently generating about 0.02 per unit of risk. If you would invest 209,000 in HB Technology TD on October 11, 2024 and sell it today you would earn a total of 47,000 from holding HB Technology TD or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Shin Steel Co
Performance |
| Timeline |
| HB Technology TD |
| Shin Steel |
HB Technology and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Shin Steel
The main advantage of trading using opposite HB Technology and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Shin 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| HB Technology vs. Seoyon Topmetal Co | HB Technology vs. PJ Electronics Co | HB Technology vs. Eagon Industrial Co | HB Technology vs. DoubleU Games Co |
| Shin Steel vs. HB Technology TD | Shin Steel vs. Ilji Technology Co | Shin Steel vs. NewFlex Technology Co | Shin Steel vs. Aprogen Healthcare Games |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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