Correlation Between Alton Sports and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Hwangkum 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 Alton Sports and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Hwangkum Steel Technology, you can compare the effects of market volatilities on Alton Sports and Hwangkum 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 Alton Sports with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Hwangkum Steel.
Diversification Opportunities for Alton Sports and Hwangkum Steel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Hwangkum is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of Alton Sports i.e., Alton Sports and Hwangkum Steel go up and down completely randomly.
Pair Corralation between Alton Sports and Hwangkum Steel
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Hwangkum Steel. In addition to that, Alton Sports is 1.18 times more volatile than Hwangkum Steel Technology. It trades about -0.35 of its total potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.16 per unit of volatility. If you would invest 527,000 in Hwangkum Steel Technology on September 4, 2024 and sell it today you would lose (23,000) from holding Hwangkum Steel Technology or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Hwangkum Steel Technology
Performance |
| Timeline |
| Alton Sports CoLtd |
| Hwangkum Steel Technology |
Alton Sports and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Hwangkum Steel
The main advantage of trading using opposite Alton Sports and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Hwangkum 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| Alton Sports vs. Korea Real Estate | Alton Sports vs. Busan Industrial Co | Alton Sports vs. UNISEM Co | Alton Sports vs. RPBio Inc |
| Hwangkum Steel vs. Duksan Hi Metal | Hwangkum Steel vs. Daejung Chemicals Metals | Hwangkum Steel vs. Taeyang Metal Industrial | Hwangkum Steel vs. Top Material Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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