Correlation Between Hana Financial and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both Hana Financial and BooKook 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 BooKook 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 BooKook Steel Co, you can compare the effects of market volatilities on Hana Financial and BooKook 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 BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and BooKook Steel.
Diversification Opportunities for Hana Financial and BooKook Steel
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hana and BooKook is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook 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 BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of Hana Financial i.e., Hana Financial and BooKook Steel go up and down completely randomly.
Pair Corralation between Hana Financial and BooKook Steel
Assuming the 90 days trading horizon Hana Financial is expected to generate 1.36 times less return on investment than BooKook Steel. But when comparing it to its historical volatility, Hana Financial is 2.53 times less risky than BooKook Steel. It trades about 0.17 of its potential returns per unit of risk. BooKook Steel Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 244,000 in BooKook Steel Co on October 28, 2024 and sell it today you would earn a total of 8,500 from holding BooKook Steel Co or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. BooKook Steel Co
Performance |
| Timeline |
| Hana Financial |
| BooKook Steel |
Hana Financial and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and BooKook Steel
The main advantage of trading using opposite Hana Financial and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, BooKook 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| Hana Financial vs. Dongbang Transport Logistics | Hana Financial vs. Seoyon Topmetal Co | Hana Financial vs. Inzi Display CoLtd | Hana Financial vs. Asiana Airlines |
| BooKook Steel vs. Hanil Chemical Ind | BooKook Steel vs. Daejung Chemicals Metals | BooKook Steel vs. Kyung In Synthetic Corp | BooKook Steel vs. Duksan Hi Metal |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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