Correlation Between Hyunwoo Industrial and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Kukil Metal 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 Hyunwoo Industrial and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyunwoo Industrial Co and Kukil Metal Co, you can compare the effects of market volatilities on Hyunwoo Industrial and Kukil Metal 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 Hyunwoo Industrial with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Kukil Metal.
Diversification Opportunities for Hyunwoo Industrial and Kukil Metal
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyunwoo and Kukil is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Hyunwoo Industrial 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 Hyunwoo Industrial Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Kukil Metal go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Kukil Metal
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to generate 1.47 times more return on investment than Kukil Metal. However, Hyunwoo Industrial is 1.47 times more volatile than Kukil Metal Co. It trades about -0.2 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.31 per unit of risk. If you would invest 275,500 in Hyunwoo Industrial Co on September 1, 2024 and sell it today you would lose (28,500) from holding Hyunwoo Industrial Co or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Kukil Metal Co
Performance |
| Timeline |
| Hyunwoo Industrial |
| Kukil Metal |
Hyunwoo Industrial and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Kukil Metal
The main advantage of trading using opposite Hyunwoo Industrial and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Hyunwoo Industrial vs. Jeju Air Co | Hyunwoo Industrial vs. Hanmi Semiconductor Co | Hyunwoo Industrial vs. Jeju Semiconductor Corp | Hyunwoo Industrial vs. ABOV Semiconductor Co |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. Gyeongnam Steel Co | Kukil Metal vs. Jeil Steel Mfg |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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