Correlation Between Daehan Steel and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Handok Clean Tech, you can compare the effects of market volatilities on Daehan Steel and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Handok Clean.
Diversification Opportunities for Daehan Steel and Handok Clean
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daehan and Handok is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Daehan Steel i.e., Daehan Steel and Handok Clean go up and down completely randomly.
Pair Corralation between Daehan Steel and Handok Clean
Assuming the 90 days trading horizon Daehan Steel is expected to under-perform the Handok Clean. But the stock apears to be less risky and, when comparing its historical volatility, Daehan Steel is 1.56 times less risky than Handok Clean. The stock trades about -0.01 of its potential returns per unit of risk. The Handok Clean Tech is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 609,000 in Handok Clean Tech on October 29, 2024 and sell it today you would earn a total of 25,000 from holding Handok Clean Tech or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Handok Clean Tech
Performance |
| Timeline |
| Daehan Steel |
| Handok Clean Tech |
Daehan Steel and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Handok Clean
The main advantage of trading using opposite Daehan Steel and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean'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 |
| Handok Clean vs. Daehan Steel | Handok Clean vs. Daechang Steel Co | Handok Clean vs. Nature and Environment | Handok Clean vs. Seah Steel Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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