Correlation Between Daehan Steel and Hironic
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Hironic 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 Daehan Steel and Hironic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Hironic Co, you can compare the effects of market volatilities on Daehan Steel and Hironic 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 Daehan Steel with a short position of Hironic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Hironic.
Diversification Opportunities for Daehan Steel and Hironic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daehan and Hironic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Hironic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hironic and Daehan Steel 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 Daehan Steel are associated (or correlated) with Hironic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hironic has no effect on the direction of Daehan Steel i.e., Daehan Steel and Hironic go up and down completely randomly.
Pair Corralation between Daehan Steel and Hironic
Assuming the 90 days trading horizon Daehan Steel is expected to under-perform the Hironic. But the stock apears to be less risky and, when comparing its historical volatility, Daehan Steel is 1.43 times less risky than Hironic. The stock trades about -0.01 of its potential returns per unit of risk. The Hironic Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 630,000 in Hironic Co on October 29, 2024 and sell it today you would earn a total of 24,000 from holding Hironic Co or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Hironic Co
Performance |
| Timeline |
| Daehan Steel |
| Hironic |
Daehan Steel and Hironic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Hironic
The main advantage of trading using opposite Daehan Steel and Hironic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Hironic 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 Hironic will offset losses from the drop in Hironic's long position.| Daehan Steel vs. Youl Chon Chemical | Daehan Steel vs. Youngchang Chemical Co | Daehan Steel vs. ENF Technology Co | Daehan Steel vs. Seers Technology |
| Hironic vs. IC Technology Co | Hironic vs. Korea Air Svc | Hironic vs. Daou Technology | Hironic vs. Foodnamoo |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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