Correlation Between Hana Financial and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Korea 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 Hana Financial and Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Korea Steel Co, you can compare the effects of market volatilities on Hana Financial and Korea 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 Hana Financial with a short position of Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Korea Steel.
Diversification Opportunities for Hana Financial and Korea Steel
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and Korea is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel and Hana Financial 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 Hana Financial are associated (or correlated) with Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Hana Financial i.e., Hana Financial and Korea Steel go up and down completely randomly.
Pair Corralation between Hana Financial and Korea Steel
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.86 times more return on investment than Korea Steel. However, Hana Financial is 1.17 times less risky than Korea Steel. It trades about 0.14 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.25 per unit of risk. If you would invest 5,990,000 in Hana Financial on September 1, 2024 and sell it today you would earn a total of 250,000 from holding Hana Financial or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Korea Steel Co
Performance |
| Timeline |
| Hana Financial |
| Korea Steel |
Hana Financial and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Korea Steel
The main advantage of trading using opposite Hana Financial and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Korea 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Hana Financial vs. Daiyang Metal Co | Hana Financial vs. Seoul Broadcasting System | Hana Financial vs. KyungIn Electronics Co | Hana Financial vs. PJ Electronics Co |
| Korea Steel vs. PJ Electronics Co | Korea Steel vs. Kukil Metal Co | Korea Steel vs. Dongwon Metal Co | Korea Steel vs. Heungkuk Metaltech CoLtd |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |